QUESTION 1 (20 Marks) Registered auditors have skills and knowledge to perform their functions and they should be completely honest in performing their functions. The following actions taken by registered auditors are examples of non-compliance with one or more of the fundamental principles.

Required: Identify with explanations which of the fundamental principles belonging to the SAICA Code of Professional Conduct have not been complied with in each of the situations described below:

a) Randy Rice the registered auditor in charge of the Perry Sauce (Pty) Ltd audit, made racist comments concerning the clients staff during an audit planning session. (3 Marks)

b) Jerry Jan the registered auditor in charge of the audit of Dribble Drabble (Pty) Ltd, charged the client a fee for audit procedures which he knew had not actually been carried out. (3 Marks)

c) Tolly Ted a registered auditor, arranged with some of his clients to pay the fees which he charged for his services in cash. Any client agreeing to do so was not charged VAT and was given a substantial discount. (5 marks)

d) The financial director of Dentists Ltd has made an offer to the audit team to take them on a weekend trip to a safari with all expenses paid for, which will become an event that occurs on a yearly basis should all audit deadlines be met annually. (6 marks) e) A fellow partner of yours, at the audit company you work for, is due to shortly marry the financial director of one of the company audit clients. She is also part of the audit team which conducts the audits for this client. (3 marks)