John Frederick Kamalie (JFK) is the Professional Accountant for ABC Electronics (Pty)Ltd (ABC). JFK makes use of Monster (Pty) Ltd (Monster) as the supplier for anytraining material that ABC might require. JFK has been receiving all-expenses-paidinternational holidays from Monster for the past three years as a "Thank you" for theirbusiness.
JFK requested Monster to develop training material for their leadership teams for allthe ABC offices in South Africa. The budget for the development is R2 000 000 which
was agreed with Monster after taking into account the time needed as well as therelevant cost per training module. Once the training material was complete, ABCreceived an invoice of R2 500 000 from Monster. JFK has therefore set up a meetingwith Monster to discuss the additional R500 000 that was invoiced.
During the meeting, the CEO of Monster, James Newlands, indicated that Monsterspent more time on developing the training material than was originally anticipated
and hence the reason for the additional R500 000 that was invoiced. However, basedon JFK's review of the training material, it is clear that the training material is basically
the same as the training material developed for a previous year's training, with onlyminor changes. JFK feels conflicted about approving the additional R500 000 based
on the work done. However, he is worried if he doesn't approve the additional R500000 it might affect his holiday to Singapore that he planned for this year, which isnormally paid by Monster.
REQUIRED:
Provide and discuss the threats in terms of the Code of Professional Conduct identifiedin the scenario. Also, provide safeguards for each of the threats identified.