Smart Parking Ltd is a profitable owner-managed business. It provides long term parking management services to office buildings and suburban shopping centres, and short term parking management services for events such as conferences and trade shows in and around Johannesburg. The company has offices in Johannesburg.

Simon Mathebula formed Smart Parking in 2005. The company is run by Simon, who is the managing director. His wife, Rebecca, the financial director, handles the accounting and financial matters of the business. Together, they own 30% of the shares. The remaining 70% of the shares are owned by Park Investments Ltd, an investment holding company formed in 2004. Rebecca also holds shares in Park Investments. Rebecca completed her training contract at BST Inc. Registered Accountants and Auditors, a medium sized practice, and qualified as a CA(SA) in 2010. BST Inc. Registered Accountants and Auditors was appointed auditors of both Smart Parking and Park Investments on the formation of these companies. You are the senior responsible for both of these audits for the financial year ended 31 August 2016. The partner responsible for these engagements, Bennie Sekese, is a personal friend of Simon and Rebecca and handles both their personal and company tax matters. Rebecca insists that both audit and advisory services for Smart Parking are to be provided by BST Inc, Registered Accountahts and Auditors. Bennie Sekese is also currently advising the company in a PAYE dispute with SARS. Although Simon and Bennie are very busy, they hold monthly meetings to review management accounts and budget diviations. Bennie Sekese often attends these meetings as financial 'advisor for Smart Parking. Required Discuss, with reasons, what threats to it's independence your firm may face by continuing to . perform the audit of Smart Parking, and what specific safeguards should be implemented to ensure such threats are reduced to an acceptable level. (Threats 16 Marksl Safeguards 9 Marks) Total 25 Marks).

QUESTION FOUR Smart Parking Ltd is a profitable owner-managed business. It provides long term parking management services to office buildings and suburban shopping centres, and short term parking management services for events such as conferences and trade shows in and around Johannesburg. The company has offices in Johannesburg Simon Mathebula formed Smart Parking in 2005. The company is run by Simon, who is the managing director. His wife, Rebecca, the financial director, handles the accounting and financial matters of the business. Together, they own 30% of the shares. The remaining 70% of the shares are owned by Park Investments Ltd, an investment holding company formed in 2004 Rebecca also holds shares in Park Investments. Rebecca completed her training contract at BST Inc. Registered Accountants and Auditors, a medium sized practice, and qualified as a CAISA) in 2010 BST Inc. Registered Accountants and Auditors was appointed auditors of both Smart Parking and Park Investments on the formation of these companies. You are the senior responsible for both of these audits for the financial year ended 31 August 2016. The partner responsible for these engagements, Bennie Sekese, is a personal friend of Simon and Rebecca and handles both their personal and company tax matters. Rebecca insists that both audit and advisory services for Smart Parking are to be provided by BST Inc., Registered Accountants and Auditors. Bennie Sekese is also currently advising the company in a PAYE dispute with SARS Although Simon and Bennie are very busy, they hold monthly meetings to review management accounts and budget diviations. Bennie Sekese often attends these meetings as financial advisor for Smart Parking Required Discuss, with reasons, what threats to it's independence your firm may face by continuing to perform the audit of Smart Parking, and what specific safeguards should be implemented to ensure such threats are reduced to an acceptable level. (Threats 16 Marks, Safeguards 9 Marks)