The following are two independent situations:

(i) Sam works as an audit clerk. He is also undertaking CPA studies along with his job. He was a member of the audit team undertaking audit of PQR company. While auditing, he comes across some specific financial information of theclient,and he believes that this information will help him in completing one of his assignments. He used the information by, carefully removing all reference in order to preserve the clients confidentiality.

(ii) Wendy has been the engagement partner on the Ace Limited audit for a number of years. Some time ago, Aces long-standing company secretary retired, and Ace took six months to find a replacement. At Aces request, Wendy performed company secretarial duties for this period of time.

Required:

a) Considering the above scenario, define actual and perceived independence and explain the importance of each.

b) For each of the above independent situations list any professional standards and regulatory requirements breached and discuss possible alternative courses of action the auditor should have taken in order to properly discharge their professional responsibilities.