QUESTION FOUR $[15]$

Smart Parking $($Proprietary$)$ Limited $($Smart Parking$)$ is a profitable owner$-$managed' business, It provides long$-$term parking management services to office buildings and suburban shopping centres, and short$-$term parking management services for events such as conferences and trade shows in and around Johannesburg. The company has offices in Johannesburg.

Simon Matebula formed Smart Parking in $1995.$ The company is run by Simon, who is the managing director. His wife, Rebecca, the financial director, handles the accounting and financial matters of the company. Together they own $30\%$ of the shares, the remaining $70\%$ of the shares are owned by Park Investments $($Proprietary$)$ Limited $($Park Investments$),$ an investment holding company formed in $1990.$ Simon and Rebecca also hold shares in Park Investments,

Rebecca completed her training contract at BST Inc. Registered Accountants and

Auditors, a medium$-$sized practice, and qualified as a CA $($SA$)$ in $2000.$

BST Inc. Registered Accountants and Auditors were appointed auditors of both Smart Parking and Park Investments on the formation of these companies. You are the senior responsible for both of these audits for the financial year ended $31$ August $2017.$ The partner responsible for these engagements, Bennie Sekese, is a personal friend of Simon and Rebecca and handles both their personal and company tax matters. Rebecca insists that both audit and advisory services for Smart Parking are to be provided by BST Inc. Registered Accountants and Auditors.

Bennie Sekese is also currently representing the company in a PAYE dispute with SARS. Although Simon and Rebecca are very busy, they hold monthly meetings to review management accounts and budget deviations. Bennie Sekese often attends these monthly meetings as financial advisor to Smart Parking.

Required:

Discuss each of the situations described above in terms of the Code of Professional Conduct. Identify the category of the threat and the threat to the fundamental principle as well as the safe guards.