Reference no: EM132464271

Audit & Assurance Assignment Brief:

ETHICS
The objectivity of external auditors may be threatened or appear to be threatened in the following circumstances:

a) The audit firm is heavily financially dependent on one significant client;
b) The audit firm, its partners or staff have a financial interest in the audit client;
c) There are family relationships between the firm, its partners, staff and the audit client;
d) The audit firm provides non-audit services to the audit client;
e) The audit firm has been the external auditor of the client for the past 10 years.

Requirement:

Part 1) Define independence and objectivity as they apply to an auditor

Part 2) Discuss the importance of auditor independence in the auditor-client relationship.

Part 3) For each of the five circumstances (a) - (e) above, explain the type of threat it creates and analyse the possible consequences of such threats to the conduct and outcome of the audit.

Part 4) Recommend the steps to be taken by the audit firm to reduce the threat to the auditors objectivity for each of the above circumstances (a) - (e).
o 3 and 4 needs to be written together and each of them needs to be supported by real life example, company etc

Appropriate and professional presentation of assignment.
o Signed assignment submission sheet
o Word document, Times New Roman, Font size 12, 1.5 line spacing
o Contents page
o Introduction
o Main body (Answers to 1), 2) 3) & 4)) max 2000words
o Conclusion
o List of references
o Headers/ footers/ page numbers
Appropriate presentation of assignment correctly referenced using the Harvard Referencing System.