Assignment Questions (Allotted Marks: 15) Question 1: Assurance is a profesional service with mam of improving the quality and transparency of informaci, to reduce the chance of problems ocurring from incorrect information. An audit is a type of assurance service. In the context of an Assurance cngagement process, external auditors provide assurance within the concept of agency, Required: a) Discuss the concept of agency theory and explain how the weditor provides assurance with suitable Practical Examples (4 marks) Note: In your answer, you need to include the discussion of agency relationship, along with its connection between shareholders. Board of Directors external audit in a listed company using some practical examples H Question 2: You are the audit senior of Ahamed & Partners an audit firm based in Muscat and have been assigned to the audit of Salalah Beaches Co, a listed company which has been an audit client for 8 years. They specialize in swim, surfing, and paddle boarding equipment Mr. Nasser al harthy was the engagement partner for Salalah Beaches Co and, as he had completed seven years as the audit engagement partner, has now been rotated off the assignment. The current audit partner, Ali said al harthy, has suggested that Mr. Nasser should take the role as independent review partner this year, to maintain the close working relationship. In addition, Salalah Beaches Co have requested that Mr. Nasser sit on the board as a non-executive director to enhance their finance skills within the organization The audit manager, not previously involved in the audit for Salalah Beaches Co, has recently declared that he has shares in Salalah Beaches Co. The total fees received last year from Salatah Beaches Co are 17% of the firm's total fee income. This year's audit fee has not been confirmed, but along with tax and other services. it could be greater than previous years. A significant proportion of last year's audit fee remains outstanding. The finance director of Salalah Beaches Co has informed the audit engagement partner that when the audit is complete, he would like the whole team to provide a luxury lunch in a five-star hotel at Salalah Required: Using the information above Identify and explain any Four ethical threats which may affect the independence of Ahamed & Partners audit of Salalah Beaches Coand (ii) For each threat, explain how it could be reduced to an acceptable level. (8 marks) Note: the total marks will be split equally between each part