QUESTION TWO

$[20]$

You are a member of the Quality Control Committee of a large audit firm; Art Andersunn and Co$.$ Part of the committee's responsibility is to determine whether prospective clients are acceptable and whether existing clients should be retained. Being a large practice, numerous potential clients are brought to the committee for consideration and the following list includes a number of recent such cases where the audit appointment is available.

Nicotar $($Pty$)$ Ltd$,$ a company which manufactures cigarettes.

Bluevex Ltd$,$ a public company which owes its current auditors R$75000$ in audit fees The company's audit committee claims that the current auditors have overcharged.

King Couriers Ltd$,$ a company which has on two previous occasions sued its auditors and on both occasions the auditors $($different firms$)$ have admitted negigence and settled out of court.