QUESTION 1 You work for a firm of accountants and auditors which has eight partners. The audit firm has been invited by the Managing Director (MD) and majority shareholder of Akobam Co, to accept appointment as statutory auditor of the company, replacing the current firm of auditors who will not be re-appointed. The principal activity of Akobam Co is the manufacture and distribution of healthcare products. Your firm has several companies operating in the healthcare sector and its client portfolio. The MD of Akobam has requested that your firm assists with the preparation of the companys tax computation, and provides consultancy services on an ongoing basis in connection with his plans to grow the business. The MD has also suggested that a partner in your firm joins the board of Akobam Co as a non-executive director. Required: Identify and explain the threats to independence and objectivity which may arise from the provision of the services requested by the Akobam Co. MD, and state how these threats should be resolved or mitigated. Explain to the MD of Akobam the difference between Statutory and Non Statutory audit. State two qualifications and four disqualifications for the appointment of an auditor to Akobam Co. QUESTION 2 You are the auditor of S.K Ltd. While conducting the audit of the company for the year ended 31 December 2017, you wanted to refer to the minutes book but the Board of Directors refused to give these books to you. Required: Discuss the implications of the directors action. ISA 610 using the work of internal auditors provides guidance to external auditors on the use of internal audit work. Required: List and explain the various criteria that should be considered by external auditors when assessing whether to rely on the work performed by internal auditors. Discuss the advantages and disadvantages of auditing standards to auditors.