Format BIOTE DO | Scenario Ethical Threat Justificatie At a corporate golfing event, the CEO and CFO of Orange Jam Electronics Limited were partnered with the audit partner of Fazy Auditing Services. Whilst on the 10th hole the CEO of Orange Jam Electronics Limited remarked; "Please thank the tax and corporate advisory partners of your firm for providing guarantees on two large low interest loans we got from Fazy Auditing Services. The loans will really assist in expanding our business and provide more work for your audit team." The audit partner thought this great news as the audit team had bust commenced it audit of Orange Jam Electronics Limited for the current year. Whilst attending a meeting at the headquarters of Orange Jam Electronics Limited, a junior audit manager responsible for auditing the sales-tax and general tax accounts of Orange Jam Electronics Limited was surprised to see members of Fazy Auditing Services' tax division. The junior audit manager, who formerly worked in the tax division, asked one of her associates why they were there. The reply was "the tax division of Fazy Auditing Services does the tax filing for Orange Jam Electronics Limited and has been doing it for years. During the conduct of audit, the senior audit manager leading the audit team auditing Orange Jam Electronics Limited noted that one of junior audit managers regularly had lunch with two senior executives and board members of Orange Jam Electronics Limited. Toward the end of the audit the senior audit manager asked the junior audit manager who the regular lunches were with. The junior audit manager replied, "Oh they are my sister and her husband. ZU ZTALTMU MUUTLING Orange Jam Electronics Limited is a designer of high technology healthcare equipment. For the current financial year the CFO of Orange Jam Electronics Limited reported the following key account balances: (a) Sales Revenue - $111 million; (b) Gross Profit - $65 million; (c) EBIT - $43 million; (d) NOPAT - $5 million; (e) Total Current Assets - $8 million; (0) Total Net PPE - $60 million; (g) Total Assets - $250 million; (h) Total Current Liabilities - $15 million; 0 Total Interest-Bearing Debt - $185 million; and () Total Equity $15 million. Fazy Auditing Services has been the auditor of Orange Jam Electronics Limited for the past 4 years and were recently reappointed to audit the financial statements for the current financial year. Required: Consider the following scenarios independently. Determine the type of ethical threat to independence that best describes the situation in each scenario and justification for your answer. Format Ethical Threat Justification Scenario I At a corporate golfing event, the CEO and CFO of Orange Jam Electronics Limited were partnered with the audit partner of Fazy Auditing Services. Whilst on the 10th hole the CEO of Orange Jam Electronics Limited remarked: "Please thank the tax and corporate advisory partners of your firm for providing guarantees on two large low interest loans we got from Fazy Auditing Services. The loans will really assist in expanding our business and provide more work for your audit team. The audit partner thought this great news as the audit team had bust commenced it audit of Orange Jam Electronics Limited for the current year. Whilst attending a meeting at the headquarters of Orange Jam Electronics Limited. a junior audit manager responsible for auditing the sales-tax and general tax accounts of Orange Jam Electronics Limited was surprised to see members of Fazy Auditing Services' tax division The junior audit manager, who formerly worked in the tax division, tha Format BIOTE DO | Scenario Ethical Threat Justificatie At a corporate golfing event, the CEO and CFO of Orange Jam Electronics Limited were partnered with the audit partner of Fazy Auditing Services. Whilst on the 10th hole the CEO of Orange Jam Electronics Limited remarked; "Please thank the tax and corporate advisory partners of your firm for providing guarantees on two large low interest loans we got from Fazy Auditing Services. The loans will really assist in expanding our business and provide more work for your audit team." The audit partner thought this great news as the audit team had bust commenced it audit of Orange Jam Electronics Limited for the current year. Whilst attending a meeting at the headquarters of Orange Jam Electronics Limited, a junior audit manager responsible for auditing the sales-tax and general tax accounts of Orange Jam Electronics Limited was surprised to see members of Fazy Auditing Services' tax division. The junior audit manager, who formerly worked in the tax division, asked one of her associates why they were there. The reply was "the tax division of Fazy Auditing Services does the tax filing for Orange Jam Electronics Limited and has been doing it for years. During the conduct of audit, the senior audit manager leading the audit team auditing Orange Jam Electronics Limited noted that one of junior audit managers regularly had lunch with two senior executives and board members of Orange Jam Electronics Limited. Toward the end of the audit the senior audit manager asked the junior audit manager who the regular lunches were with. The junior audit manager replied, "Oh they are my sister and her husband. ZU ZTALTMU MUUTLING Orange Jam Electronics Limited is a designer of high technology healthcare equipment. For the current financial year the CFO of Orange Jam Electronics Limited reported the following key account balances: (a) Sales Revenue - $111 million; (b) Gross Profit - $65 million; (c) EBIT - $43 million; (d) NOPAT - $5 million; (e) Total Current Assets - $8 million; (0) Total Net PPE - $60 million; (g) Total Assets - $250 million; (h) Total Current Liabilities - $15 million; 0 Total Interest-Bearing Debt - $185 million; and () Total Equity $15 million. Fazy Auditing Services has been the auditor of Orange Jam Electronics Limited for the past 4 years and were recently reappointed to audit the financial statements for the current financial year. Required: Consider the following scenarios independently. Determine the type of ethical threat to independence that best describes the situation in each scenario and justification for your answer. Format Ethical Threat Justification Scenario I At a corporate golfing event, the CEO and CFO of Orange Jam Electronics Limited were partnered with the audit partner of Fazy Auditing Services. Whilst on the 10th hole the CEO of Orange Jam Electronics Limited remarked: "Please thank the tax and corporate advisory partners of your firm for providing guarantees on two large low interest loans we got from Fazy Auditing Services. The loans will really assist in expanding our business and provide more work for your audit team. The audit partner thought this great news as the audit team had bust commenced it audit of Orange Jam Electronics Limited for the current year. Whilst attending a meeting at the headquarters of Orange Jam Electronics Limited. a junior audit manager responsible for auditing the sales-tax and general tax accounts of Orange Jam Electronics Limited was surprised to see members of Fazy Auditing Services' tax division The junior audit manager, who formerly worked in the tax division, tha