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Question - You are a partner in the accounting firm, Ng&Chang Chartered Accountants. Your firm provides a range of non-audit services to Rabbit Co which includes bookkeeping, payroll, tax computation and advice. The company recently applied for a bank loan to finance future operations and grow the business. The bank has requested an audited set of financial statements. In order to secure the bank loan, the directors have approached Ng&Chang to become the company's auditors, in addition to the provision of the existing services.
Required - What are the two key threats to the auditor's independence in this scenario if Ng&Chang accepts the audit engagement? Justify your answer.
The partners agreed to share profits and losses equally and decided to invest an equal amount in the partnership. Prepare the necessary journal entries in the books of Mulles. Also, record the formation of the partnership in a new set of books
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