Figures & Co is one of the established accountancy firm located in Klang Valley. You are attached with this firm since 2018 under audit department. Recently, you have been called by audit manager, Encik Shahrul to be with the audit team to perform financial statements audit for the year ended 31 March 2022. Your client, SouthCee Enterprise (SouthCee), is a business specialising in manufacture and supply electronic equipments across Malaysia. SouthCee has been an audit client for five years and you have been with the team to audit SouthCee since you joined the firm.

Following are the informations obtained during initial meeting with three directors of SouthCee.

(i) SouthCee is currently been working to be listed in Bursa Malaysia. The directors have established an audit committee, as required by corporate governance regulations. However, no further action has been taken in this respect.

(ii) You have been asked to continue to prepare the companys financial statements as in previous years.

(iii) SouthCee would like to invite the whole audit team to attend an evening reception in Hilton Hotels & Resorts, Kuala Lumpur. Among the agenda is SouthCee will present their listing arrangements to banks and existing major shareholders.

(iv) SouthCee has indicated that the fee for taxation services rendered for the year ended 31 March 2022 will be paid as soon as the taxation authorities have agreed the companys taxation liability. You have been advising SouthCee regarding the legality of certain items as allowable for taxation purposes and the taxation authority is disputing these items.

Based on above, required:

(a) Explain audit procedures that should be performed by Figures & Co prior to financial statements audit begin.

(b) Discuss FOUR (4) ethical threats that may compromise the independency of Figure & Co in completing the financial statements audit to SouthChee Enterprise. For each threat, explain how highlighted threats should be managed.