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Consider the following independent situations in relation to Adventure Travel Ltd (ATL), a major client of your audit firm, KC Associates: O Terry is

 

Consider the following independent situations in relation to Adventure Travel Ltd (ATL), a major client of your audit firm, KC Associates: O Terry is the eldest son of the managing director of ATL. During vacation work at KC Associates, Terry is assigned to the audit of ATL. Tery's work comprised testing the internal controls of the cash payments system. (ii) ATL contributes around 20% of the total audit fee revenue and 30% of the non- audit fee revenue of KC Associates. ATL has not paid any of the fees, citing cash flow problems. The partners at KC Associates are reluctant to put any pressure on ATL for outstanding fees as ATL is a high-profile client that they wish to retain. (ii) The partners at KC Associates frequently hire cars from ATL to visit long- distance clients. ATL gives 10% discount to its loyal customers, including KC Associates. Recently, an audit manager at KC Associates, Michael Jones, hired a four-wheel drive from ATL to go on holiday with his family at the same terms as those offered to KC Associates. Required: For each of the above independent situations () to (ii), state whether APES110 has been breached, and justify your answer.

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