You are the audit manager in the audit firm of Dark Co One of your audit clients is NorthCee Co, a company specialising in the manufacture and supply of sporting equipment NorthCee have been an audit client for five years and you have been audit manager for the past three years while the audit partner has remained unchanged You are now planning the audit for the year ending 31 December 2020 Following an initial meeting with the directors of NorthCee, you have obtained the following information NorthCee is attempting to obtain a listing on a recognized stock exchange The directors have established an audit committee, as required by corporate governance regulations, although no further action has been taken in this respect Information on the listing is not yet public knowledge You have been asked to continue to prepare the companys financial statements as in previous years As the companys auditors, NorthCee would like you and the audit partner to attend an evening reception in a hotel, where NorthCee will present their listing arrangements to banks and existing major shareholders NorthCee has indicated that the fee for taxation services rendered in the year to 31 December 2018 will be paid as soon as the taxation authorities have agreed the companys taxation liability You have been advising NorthCee regarding the legality of certain items as allowable for taxation Purposes and the taxation authority is disputing these items Finally, you have just inherited about 5 of NorthCees share capital as an Inheritance on the death of a distant relative Required (a) Identify, and explain the relevance of, any factors which may threaten the independence of Dark Cos audit of NorthCee Cos financial statements for the year ending 31 December 2020 Briefly explain how each threat should be managed (5 Marks)

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You are the audit manager in the audit firm of Dark & Co. One of your audit clients is NorthCee Co, a company specialising in

You are the audit manager in the audit firm of Dark & Co. One of your audit clients is NorthCee Co, a company specialising in the manufacture and supply of sporting equipment. NorthCee have been an audit client for five years and you have been audit manager for the past three years while the audit partner has remained unchanged.You are now planning the audit for the year ending 31 December 2020.Following an initial meeting with the directors of NorthCee, you have obtained the following information.
1. NorthCee is attempting to obtain a listing on a recognized stock exchange. The directors have established an audit committee, as required by corporate governance regulations, although no further action has been taken in this respect. Information on the listing is not yet public knowledge.
2. You have been asked to continue to prepare the companys financial statements as in previous years.
3. As the companys auditors, NorthCee would like you and the audit partner to attend an evening reception in a hotel, where NorthCee will present their listing arrangements to banks and existing major shareholders.
4. NorthCee has indicated that the fee for taxation services rendered in the year to 31 December 2018 will be paid as soon as the taxation authorities have agreed the companys taxation liability. You have been advising

NorthCee regarding the legality of certain items as allowable for taxation Purposes and the taxation authority is disputing these items.Finally, you have just inherited about 5% of NorthCees share capital as an Inheritance on the death of a distant relative.

Required:

(a) Identify, and explain the relevance of, any factors which may threaten the independence of Dark & Cos audit of NorthCee Cos financial statements for the year ending 31 December 2020. Briefly explain how each threat should be managed. (5 Marks)