CASE 1

XYZ & Co has a client company, Delta Alpha Bhd which operates a hotel business. Recently, the audit partner of XYZ & Co discovered that the audit manager patronises the hotel Delta Alpha Bhd during the weekends for relaxation purpose. Because he the audit manager, Delta Alpha Bhd allow him 50% off normal charges for room service charge, Gym charges and for all food and drinks bought the hotel restaurant.

Requirement: Identify the ethical issues in the above scenario and mention the measures the audit firm should take to address the ethical issues

CASE 2

Durian Bhd is considering expanding the scope of its business from Durian plantation to processing of the Durian after harvesting to meet consumer special nutritional need. The expansion requires more capital to finance the new project. Jeze & Co, the audit firm of Durian Bhd has been invited to partake in the financing arrangement. It was agreed that Jeze & Co have the option of either buying convertible debenture or operating a separate joint venture company. If the company is established, Durian Bhd and Jeze & Co will share the control of the business. Identify the ethical issues to be considered in the scenario above.

Identify the ethical issues in the above scenario and mention the measures the audit firm should take to address the ethical issues.