Question
You are Margaret String, one of the partners in the accounting firm Bader, String, Floss & Co. You have a large client, Drench Ltd, for
You are Margaret String, one of the partners in the accounting firm Bader, String, Floss & Co. You have a large client, Drench Ltd, for which your firm has carried out a range of taxation, consultancy, audit and other assurance services. The firm now obtains significant fee income from Drench. An amount still has to be paid for work carried out earlier in the year in relation to consulting advice given to Drench about internal controls around its new purchase ledger system that was implemented during the year. The planning work for the year end is about to commence and this will be the twelfth year that you have carried out the audit. The relationship between Drench and the audit team is excellent and the same audit staff have been happy to return to carry out the audit for the last five years, this consistency of staffing has been welcomed by Drench's accounting staff who feel this allows the audit to be done quickly and efficiently. Drench is very happy with the quality of the audit staff, in fact it recently offered the role of Financial Controller to the audit team senior, Sally Bring. Sally accepted and will be starting her new role before the year-end audit visit. Before she leaves the firm, Sally has decided to take the audit team out for dinner, to say goodbye and thank them for their work over the last five years. Required Identify the risks to independence arising from the above and suggest how these threats might be mitigated.
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