PROFESSIONAL ETHICS (10 MARKS) (Suggested Time: 18 Minutes) The following are independent situations: Situation 1: You are an audit assistant for KPMM Charted Accountants currently undertaking university studies. While auditing the accounts of one of the clients, you come across certain information that you believe will assist you in completing one of your university assignments. You carefully used the information while carefully removing all the references of the client. Situation 2: PWK Charted Accountants have been engaged to audit Sky Construction Limited, a construction company. You have been assigned by the audit leader to test the internal controls of the cash payment and cash receipt systems of the client, Sky Construction Limited. You were very happy to be part of the audit team as your father is the head foreman of Sky Construction Limited. Situation 3: Young & Associates is the auditor of Pacific Furniture Limited, a large furniture manufacturer. The Company is listed on the local stock market and is currently facing financial difficulties. Pacific Furniture Limited is an important client of Young and Associates but has not paid its audit fees for the past two years. You, the audit partner of Young and Associate recently threatened to resign from the audit if the outstanding fees were not paid. To prevent this from occurring, the client offered to supply Young and Associates with office furniture. This was accepted by you as full consideration of the outstanding fees, even though the furniture was only worth 75% of the balance of audit fees. Required: 1. For each of the above independent situations, list (if) any professional ethical principle/ code of professional conduct that has been breached. Explain. (5 marks) 2. For the above breaches (if any), discuss possible alternative courses of action you as the auditor should have taken in order to properly discharge your professional responsibilities. (5 marks)