4 a) Auditors are regulated by professional bodies and should follow recognised auditing standards such as International Standard of Auditing (ISAs). Required; Explain why it is importance for audits to be conducted in accordance with auditing standards that are common to all audits. b) The IESBA Code of Ethics for Professional Accountants highlights a number of areas in which threats might arise to independence and objectivity. Required; i. Explain what is meant by an advocacy threat and give an example of a situation which may create an advocacy threat. ii. State the category of threat that arises from an inappropriately close business relationship with a client and give two examples of close business relationships that would cause such a threat. 21 Page c) An audit is one type of assurance engagement, but practitioners may carry out other assurance engagements, such as review engagements. Required; Describe a review engagement and explain the level of assurance given in such an engagement. d) Explain the terms 'accountancy', 'stewardship' and 'agency' and explain how they can be applied to the relationship between directors and shareholders