sing the Part A (10 marks) You are an experienced audit manager at Samway Baker Fitzgerald (SBF), an accounting firm with offices in Orange, Wagga , -practice Tamworth, Port Macquarie and Albury in NSW, Toowoomba i independence requirements of APES 110 are being met. You note the following: Sing Role for ditu 1. Paterson Partners (PP) is a law firm. SBF has performed the audit of PP's solicitors' trust account for many years. Recently, the two firms agreed to combine their collective expertise in the software in venture 'one-stop shop for software entrepreneurs. To date, SBF has funded all costs relating to establishing the new business and is carrying the 50% owing from PP as a loan receivable. The new bu Pty Ltd, hopes to capitalise on the profile of the two firms to woo software entrepreneurs away from their current advisers. 2. Newbridge Limited is a listed construction company. The engagement partner's wife, Jacqui George, recently purchased a significant number of shares in Newbridge on the advice of her financial plar Required For each of the independent situations above, and using the conceptual framework in APES 110, answer the following questions: a. Identify potential threats to independence. (2 marks) b. Recommend two (2) safeguards to reduce the independence threats. (4 marks) c. Provide an objective assessment of whether audit independence can be achieved. (4 marks) Part B (5 marks) As part of your audit of leading clothing retailer, Bletchington Limited, you review its internal controls over inventory. You have prepared the following comments which describe Bletchington 1. When ordered materials arrive at Bletchington Limited they are received by the storeroom clerks. The clerka count the merchandise and check the counts against the supplier's bill of lading. All supplie initialled, dated and filed in the storeroom to serve as receiving reports. 2. To manage inventory more efficiently, Bletchington has outsourced responsibility for reordering clothing to Chiltern Limited, who analyse sales in Bletchington's retail outlets each evening, places an suppliers and sends the purchase order to Bletchington's accounts payable team. Required For each process a. list the internal control deficiency or deficiencies. (2 marks) b. explain the type(s) of misstatement(s) and the account(s) that is (are) likely to be misstated because of the deficiency. For example, 'accounts payable will be overstated because... (2 marks) cidentify the key assertion(s) affected by each deficiency. (1 mark) In the answer box below, write the letter and your answer. e.g. a. Your answer Activate Set sing the Part A (10 marks) You are an experienced audit manager at Samway Baker Fitzgerald (SBF), an accounting firm with offices in Orange, Wagga , -practice Tamworth, Port Macquarie and Albury in NSW, Toowoomba i independence requirements of APES 110 are being met. You note the following: Sing Role for ditu 1. Paterson Partners (PP) is a law firm. SBF has performed the audit of PP's solicitors' trust account for many years. Recently, the two firms agreed to combine their collective expertise in the software in venture 'one-stop shop for software entrepreneurs. To date, SBF has funded all costs relating to establishing the new business and is carrying the 50% owing from PP as a loan receivable. The new bu Pty Ltd, hopes to capitalise on the profile of the two firms to woo software entrepreneurs away from their current advisers. 2. Newbridge Limited is a listed construction company. The engagement partner's wife, Jacqui George, recently purchased a significant number of shares in Newbridge on the advice of her financial plar Required For each of the independent situations above, and using the conceptual framework in APES 110, answer the following questions: a. Identify potential threats to independence. (2 marks) b. Recommend two (2) safeguards to reduce the independence threats. (4 marks) c. Provide an objective assessment of whether audit independence can be achieved. (4 marks) Part B (5 marks) As part of your audit of leading clothing retailer, Bletchington Limited, you review its internal controls over inventory. You have prepared the following comments which describe Bletchington 1. When ordered materials arrive at Bletchington Limited they are received by the storeroom clerks. The clerka count the merchandise and check the counts against the supplier's bill of lading. All supplie initialled, dated and filed in the storeroom to serve as receiving reports. 2. To manage inventory more efficiently, Bletchington has outsourced responsibility for reordering clothing to Chiltern Limited, who analyse sales in Bletchington's retail outlets each evening, places an suppliers and sends the purchase order to Bletchington's accounts payable team. Required For each process a. list the internal control deficiency or deficiencies. (2 marks) b. explain the type(s) of misstatement(s) and the account(s) that is (are) likely to be misstated because of the deficiency. For example, 'accounts payable will be overstated because... (2 marks) cidentify the key assertion(s) affected by each deficiency. (1 mark) In the answer box below, write the letter and your answer. e.g. a. Your answer Activate Set