Question
Write an answer to the situation described below addressing the required criteria (i.e. 1 & 2) in each independent case. You may use a tabulated
Write an answer to the situation described below addressing the required criteria (i.e. 1 & 2) in each independent case. You may use a tabulated format if helpful having Threats, Safeguards and Objective Assessment as column headings.
Christopher Brown has been appointed as a junior auditor of Apex Chartered Accountants (ACA). One of his first tasks is to review the firms audit clients (all public interest entities) to ensure that independence requirements of APES 110 (Code of Ethics for Professional Accountants) are being met. His review has revealed the following:
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ACA has recently been appointed the auditor of Delicious Foods Limited (DFL).The senior-in-charge, Andrew Reynolds, and an assistant observed the inventory stocktake. On completion of the inventory observation, Karla White, Delicious Foods accountant, informed Andrew that the shipping supervisor had a small gift for him and the assistant. Andrew asked Karla what the gift was for, and Karla responded that they had always given small gifts of food items to their previous auditors on completion of the inventory observation. Andrew estimates that the value of the food is less than $100.
For each of the independent situations above, and using the conceptual framework in APES 110 (Code of Ethics for Professional Accountants), answer the following questions:
1. Identify potential threat(s) to independence & recommend safeguards (if any) to reduce the independence threat(s) identified.
2. Provide an objective assessment of whether audit independence can be achieved
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