A. Johnston (Pty) Ltd, a large manufacturing audit client of MGKP had many staff members leaving the company due to emigration. Johnston (Pty) Ltd is considering to not replace these staff members, but to rather appoint MGKP, your audit firm, to provide the following services:

A1. Performing the function of the credit controller of Johnston (Pty) Ltd. MGKP would approve credit limits for new debtors, follow up on overdue debtors accounts and decide whether long outstanding debtors should be handed over to the company's lawyers for collection or written off.

A2. Assisting with the preparation of Johnston (Pty) Ltd.s monthly VAT returns and advising the company on tax legislation on an ongoing basis.

4.3) Indicate in respect of Johnston (Pty) Ltd, (Scenario A), whether MGKP should: a. Perform the function of the credit controller. b. Assist with taxation matters. Answer question 4.3 in terms of the independence requirements of the Code of Professional Conduct. Where appropriate, state the safeguards which should in place to ensure that threats to independence are eliminated/reduced to an acceptable level.