You had been recently promoted to Senior Auditor of the audit firm Jose Rizal and Associates and
Question:
You had been recently promoted to Senior Auditor of the audit firm Jose Rizal and Associates and was asked to
consider the following independent situations:
One of your major clients, Just Squeeze Juice Pty Ltd, has talked to you about a consulting engagement
next year for you to do complete review of the adequacy of the entity's quality controls over the production
of its fruit juices. However, the managing director has indicated that some of the Board are concerned about
you taking up too much of their staff's time asking unnecessary questions. Therefore, he has suggested that
your chances of getting the engagement will be significantly improved if you keep your questions of staff to
a minimum during the current audit.
Question:
(a) Identify the type of potential threat to independence. Justify your answer. (8 marks)
(b) Explain what safeguards, if any, that could be implemented to reduce the independence threats. (4
marks)
(c) Assess whether audit independence can be achieved. (4 marks)