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QUESTION - McGrath Partners is tendering for the audit of Infinity for the 2021 financial year. As part of the audit team at McGrath Partners, you note that McGrath holds an interest in Infinity during your review of an Australian Securities and Investments Commission (ASIC) company extract for Infinity. The interest is material to McGrath.
Required -
1. What is the threat to compliance with the fundamental principles?
2. Explain whether any safeguards could be put in place to reduce the threat to an acceptable level.
3. Would it make any difference to your answers if the shares were held by a tax partner in the office, rather than being held directly by McGrath?
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