Case Study 2 Geojit Audit Company (hereafter the auditor) has recently awarded a contract to audit the financial reports of Mazoon Manufacturing Company (hereafter the company). Mazoon Manufacturing Company is known company in industrial supplies. 52% of the shareholding of the company is held by three industrialists in the region, who owns several businesses inside and outside the country. The decision to change the auditors was taken after Mr. Emthiyas was promoted as Chief Accountant in the company. Mr. Emthiyaz has worked in the auditing company after completing his post-graduation in accounting. He knows the management of Geojit Auditing Company and has secured an auditing job for his son two years back. Mr. Emthyas informed the management about his contacts with the auditors. The previous auditors were very strict and on two previous occasions have issued a qualified audit report. This was one of the major reason for the decision to appoint a new auditing company. The company has decided to offer special privileges to the auditors of the company, for instance free accommodation and traveling facilities. Recently, the company has convened a meeting of accountants with the objective of setting up a new accounting software. The auditors also took part of the meeting and provided their advice. Since the auditors were actively involved in the meeting, the company decided to award the contract for the new accounting software to Geojit Auditing Company. With both contracts in hand, total revenue from Mazoon Manufacturing Company is estimated to be 20% of total revenues of the auditing company. Based on the above case, answer the following: (Maximum word count for Case Study is 400 Words) (4+3+3 = 10 Marks) 1. Briefly explain the various threats which may affect the independence of Geojit Auditing Company's audit of Mazoon Manufacturing Company. 2. According to you, what actions should the auditors take while evaluating the various threats? How these threats might be avoided 3. Which of the five fundamental principles will be most affected, if Geojit Auditing Company's audit of Mazoon Manufacturing Company