(b) Professional ethics and Independence

Sin Au Dit & Associates, a medium-sized accounting firm in Kuala Lumpur have been approached by Mr Biz Naik , the founder of Naik Bioenergy Berhad, a successful renewal energy (RE) start-up that operates the biggest biomass power plant in Malaysia, utilizes empty fruit bunches, palm oil fibre and palm kernel shell as fuel resources. The firm, Sin Au Dit & Associates and the proposed engagement partner, Mr Sin Part Ner, have never done any audit in the RE sector before. However, the proposed senior-in-charge, Sun Rui has two (2) years of experience audit RE sector audit during her prior stint with one of the Big Four in Malaysia. A previous employee of Sin Au Dit & Associates from the transaction advisory division, Devi Raj, now works at Naik Bioenergy Berhad as their accountant. She did not work in the audit division at Sin Au Dit & Associates and none of the current auditors have ever worked with Devi Raj. Mr Sin Part Ner knows Mr Biz Naik through Soup Kitchen voluntary group that serve the hungry throughout the week. However, that was 3 years ago since they last met and they do not meet or socialise in any other circumstances.

Required

1(b)(i) Will the proposed audit team be able to carry out their responsibilities adequately to meet all the requirements set out in APES 110 or IESBA to provide assurance services to Naik Bioenergy Berhad in the RE sector?

1(b)(ii) Are there any independence concerns?