the institute of international stuies

Umbrella Auditors and has resulted in substantial business growth as well as increased staff bonuses linked to this expansion. The organisational culture of Umbrella Auditors is based on a mix of the Affiliative and Transactional styles of leadership: staff are told by the General Manager that "We all treat treated as member s of a big family, so everybody is expected to help out with getting each project completed on time and keeping our clients happy." Staff members may sometimes be involved in doing a range of both audit and non audit tasks, resulting in the boundary lines between auditing and non auditing services becoming blurred in order to meet the workload demands. At the recent staff meeting, the The General Manager announced that the non-audit revenue is now so important to the firm that staff must not do anything to threaten that source of income. The GM went on to say that he was thinking of offering even more non-audit services including environmental reporting and environmental auditing services, because some of the clients are seeking to demonstrate and advertise their environmental sustainability credentials and are requesting assistance from Umbrella Auditors that may help them to begin environmental reporting and implement environmental audits. MPAA601 Strategic Business Leader Mid-Block Exam Question Paper T3, 2021 Page 2 of 7 Question 1a Corporate governance codes in some businesses, and professional standards in the USA and other countries prohibit external audit firms from also providing non-audit services to clients, without the prior approval of the client's audit committee. This is because it could become an ethical threat to the interests one or more key stakeholder groups. Identify and discuss how providing non-auditing services by Umbrella Auditors could become an "ethical threat to a key stakeholder group (identify at least one key stakeholder group)