Question
You have been the auditor of the agro-tourism complex Kyzyl-Tash LLC for 2 years. At the planning stage, you were provided with information that company
You have been the auditor of the agro-tourism complex Kyzyl-Tash LLC for 2 years.
At the planning stage, you were provided with information that company employees are entitled to a 20% discount on company products and services. At the same time, the same discount on products was offered to you last year, during the audit of the previous year.
During the year, the chief accountant of Kyzyl-Tash went to a short-term study in another country. Since he did not find a temporary replacement in the company to perform key functions in the accounting department, Kyzyl-Tash LLC temporarily hired an audit manager from your audit team for 4 months, since he knew the Company well. The total cost of services to be paid by Kyzyl Tash amounted to 14%, including audit services and tax audit.
Having reviewed the correspondence, as well as from an informal conversation with the employees of Kyzyl Tash LLC, you concluded that your partner and the head of the agro-tourism complex have been good friends for many years and spend family vacations together. But at the same time, you know that last years audit account has not yet been fully paid, the remaining amount payable is 10%. Your partner does not make a claim in this regard to Kyzyl Tash.
Required:
A) List the FIVE threats provided in the Code of Ethics and explain how their impact can be prevented/safeguarded at the legislative and professional levels. (5 points)
B) Are there any threats to the ethical behavior of the audit team members in relation to Kyzyl-Tash? Explain if any. (5 points)
C) For the threats that you have identified, draw up an action plan with safeguards to prevent these threats. (5 points)
D) What procedures for accepting and continuing client relationships should be applied? (5points)
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