Threats to the fundamental principles of ethical behaviour (15 Marks) The Code of Professional Conduct identifies possible threats to the fundamental principles of ethical behaviour and suggests safeguards to reduce or eliminate the threats. Consider the following unrelated situations: 1. Joe Verster has been the partner in charge of the audit of ABC Ltd, a listed company for the past nine years. 2. Du Toit & Co. an audit firm, is asked to provide internal audit services to XYZ Ltd. XYZ Ltd is not an audit client of Du Toit & Co. Page 18 of 23 3. Du Toit & Co, an audit firm, has been requested by one of their clients to lend them a trainee accountant to work in their accounting department for a period of three months. 4. Du Toit & Co. an audit firm has been approached by XYZ Ltd, a large audit client, to recruit a financial director on their behalf. REQUIRED: Discuss each of the above situations in terms of possible threats to the fundamental principles of ethical behaviour as identified by the SAICA Code of Professional Conduct. Your answer should be set out as follows: For each of the situations above: a category of threat; for each category of threat, identification of fundamental principle(s) that could possibly be threatened; discussion on why the situation creates a threat; discussion on possible safeguards which could be put in place to reduce the threat. (15)