Question 2

You are the audit senior with HLAM Chartered Accountants. Your audit manager Michael Lim has just assigned you to the audit of Fiabci Malaysia Limited (Fiabci) for the year ended 31 December 2019. The reason behind your assignment to Fiabci Limited's audit was that you had recently been seconded for nine months to work with Fiabci's financial reporting department. Your client is a property developer. Michael feels that your knowledge of Fiabci's business will aid in increasing the efficiency of the current year's audit. Fiabci has a reasonably steady growth in 2019, with sales holding up despite increasing competition from other property developers.

Required

(a) Identify and explain the significant threats to potential ethical problems in the audit of Fiabci Limited

(b) Suggest any relevant and practical safeguards you feel may be. appropriate for the issues identified.