Adiba and Alia are partners in AA & Co, a small-sized accounting firm in Kuantan. AA & Co is the auditor for Asmatar Bhd, a company that produces sport equipment. The firm is also the auditor for Titanium Sdn Bhd, which had a contract with Asmatar Bhd to supply racing bike equipment. The following are five (5) ethical issues that arise during the annual audit. Three (3) issues arise from the audit of the abovementioned clients, and the other two (2) are from other clients.

i. Alia, who is the audit partner for Asmatar Bhd, is also acting as the audit partner for Titanium Sdn Bhd. Asmatar Bhd has just initiated a proposal to renew its procument contract with Titanium Sdn Bhd for the next five years. Titanium Sdn Bhd has asked Alia to provide advice on the matter.

ii. Syamil, an audit manager who is responsible for the audit engagement for Asmatar Bhd, holds 1,000 units of ordinary shares in the company, which amounted to less than 1% of the total shares issued. Alia only found out about this after the engagement had begun. However, she emphasised that she herself does not hold any shares in Asmatar Bhd.

iii. Adibas younger brother, Qayyum, who had just graduated with a Bachelor of Mechanical Engineering from one of the local universities, was offered a position as an engineer at Asmatar Bhd. Qayyum is considering the offer as Asmatar Bhd offered a starting salary that is higher than the industry average

.iv. One of the audit clients of AA & Co, Moulder Sdn Bhd, had not paid their audit fees for the past three (3) years. In order to overcome the unpaid audit fees, Moulder Sdn Bhd offered to supply AA & Co with new office furniture. The partner had accepted this offer in full consideration of the outstanding fees, even though the furniture was only worth 70% of the outstanding fees

.v. MAQ Sdn Bhd is one of the major audit clients of AA & Co, contributes almost 35% of the firms annual income. During the current years audit, major discrepancies were noted relating to material overstatement of the companys revenues as well as nondisclosure of a contingent liability. The management refused to adhere to the financial reporting requirements and threaten to change the auditor if AA & Co qualifies the audit report

Required:

Comment on each of the ethical issues above in the context of the independence requirement as stated in the MIAs By-Laws (On Professional Ethics, Conduct, and Practice)