You are an audit manager of Cent & Co and you came to know about several threats to independence at a recent meeting, and these ethical matters are related to different audit clients. Identify threats of each situation at different clients and give the reason of identification. Also suggest any two safeguards for each situation?

 Q1 Light & Co has facing some pension deficit while formulation of pension fund and finance director has contacted your firm for valuation services for pension fund.?

Q2 Financial director of Brown Co has requested your firm to add an audit senior "Alex Smith" to recent audit team that will conduct audit for Brown Co but she has no past working experience with Brown Co. Also it came to know  Alex Smith is also wife of a financial controller.?

 Q3 Gates Co is one of the audit client that provide loan and financial services Finance director of Gates co is offering one of the senior member of audit team a loan  at a reduced interest rate.

 Q4 Why the external auditors of Cent & Co need to communicate the audit committees at their audit clients? (Any three points)Multi Line Text.

 Q5 Define the term "Internal controls".Multi Line Text.

Answer rating: 100% (QA)

Q1 There is a threat to independence as the audit manager may be asked to provide a valuation service for the pension fund which could lead to a confl... View the full answer