QUESTION TWO

Mapambano International is a company listed at the Stock exchange. It manufactures and wholesale furniture. Tulivu associates audits the company and the audit manager is Ms. Mpole. The following matters arose during the audit of groups financial statements for the year to 30 June 2022. 3

(a) During the annual physical count at the companys warehouse, the audit staff attending the count were given an offered to purchases any furniture at 20% off their market retail process.

(b) The Chief Executive Officer (CEO) of Mapambano International, Mr. Magumashi owns a private air plane. He invoices the company monthly for that portion of operating costs which reflects business use. One of the invoice showed that, Ms. Mpole was flown to Zanzibar in September 2021 and flown back one week later. Neither the party to the engagement letter have offices in Zanzibar.

(c) Last week, Mr. Magumashi announced his engagement to be married to his personal assistant Ms. Mpambanaji. Before joining Mapambano International in March 2022, Ms. Mpambanaji had been Tulivus accountant responsible for the audit of Mapamabano International.

Required:

Discuss the ethical issues raised in each of the above scenarios and indicate actions which might be taken by Tulivu associates in relation to such matters. (3 Marks)