Question
You may use a tabulated format if helpful having Threats, Safeguards and Objective Assessment as column headings. a) WAL has performed the audit of Tasty
You may use a tabulated format if helpful having Threats, Safeguards and Objective Assessment as column headings.
a) WAL has performed the audit of Tasty Food Pty Ltd. (Tasty Food), a large proprietary company for the last two years. WAL has also been providing services related to the preparation of accounting records and financial statements for Tasty Food.
b) WAL has also recently been approached by Western Mining Limited (WML) to conduct its audit. The accountant at WML, Stephanie Gellar is the wife of David Gellar who is an audit partner at WAL. David has shown interest to lead the WML audit.
c) WAL has been recently approached by Ultimate Sports Limited (USL) to conduct its audit. The accountant at USL, William Ferguson is the son of Sarah Ferguson, who is an audit partner at WAL. Sarah will not be involved with the USL audit.
Required: For each of the independent situations above, and using the conceptual framework in APES 110 (Code of Ethics for Professional Accountants), answer the following questions: 1. Identify potential threat(s) to independence & recommend safeguards (if any) to reduce the independence threat(s) identified. (10 marks) 2. Provide an objective assessment of whether audit independence can be achieved (10 marks)
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