Ethics

The objectivity of external auditors may be threatened or appear to be threatened in the following circumstances: a) The audit firm has been the external auditor of the client for the past 10 years

b) The audit firm provides non-audit services to the audit client

c) The audit firm is heavily financially dependent on one significant client

d) The audit firm, its partners or staff, have a financial interest in the audit client

e) The audit partner has been invited to sit on the board of directors. Requirement:

For each of the five circumstances (a) - (e) above, explain the type of threat it creates and analyse the possible consequences of such threats to the conduct and outcome of the audit.