You are the audit manager of Coopers & Co and you are planning the audit of HLT Company which is an insurance company and has been an audit client for four years. During the planning stage of the audit you have obtained the following information: The audit senior at Coopers & Co had worked as the financial controller at HTL for the last three months in the financial year that is to be audited. The audit partner has recommended that that the audit senior works on the audit as he has a good knowledge of the client. Income derived from auditing HTL company has been outstanding from the last two Engagements HTL subsidizes the cost of the annual staff dinner held by Coopers & Company. They have been doing this for the last two years and according to the audit partner, the company is very appreciative. Jose Martinez is a CA, but not a partner, with three years of professional experience with Coopers. He owns 50 shares in HLT company, but he does not take part in audit of HTL and the amount of stock is immaterial to the total value of his wealth. A. Briefly explain FIVE (5) principles of professional ethics for the auditor. (10 marks) B. Each of the situations identified above by the audit manager involves a possible violation of the ICAJ code of ethics. For each situation: i. Decide whether the code has been violated. ii. Briefly explain how the situation violates or does not violate the code. (8 marks) C. After accepting an engagement, a CA firm discovers that the client's industry is more technical than he realized and that he is not competent in certain areas of the operations. What are the CA's options?