Will you include the short article in your audit firm

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Reference no: EM133073517

Question -

a) You work as an audit partner of MQ Chartered Accountants (MQCA) and are in-charge of the firm's quality control policies and procedures. One of the employees reporting to you is an audit manager who got married six months ago. The audit manager informs you that his wife's father passed away three months ago. Upon reading the will the wife learnt that her father left her one half of his estate. Included in the bequest are shares in a MQCA client company (Zeco Ltd) which is listed on the Australian Securities Exchange. The audit manager is a member of the audit team of this company. The shares' value is material in relation to the audit manager and his wife's total assets.

Required - With reference to IFAC Code of Ethics for Professional Accountants determine whether you will include the audit manager as part of the audit team to audit Zeco Ltd.

b) On 1 July 2014 CHKS were appointed as auditors of Bromwell Pty Ltd (Bromwell). The company invests in commercial properties and derives its income from rents. The current Bromwell engagement partner is also an expert in valuing commercial properties, and in 2013 he was engaged by Bromwell to value a property which the company subsequently acquired. The property's value is material relative to the company's current property portfolio. The engagement partner is now in the planning stage of Bromwell's 2015 financial statements.

Required - From the above scenario, identify any threats to compliance with the IFAC Code of Ethics for Professional Accountants.

c) Your audit firm is currently advising one of its listed client companies Hallway Industries Limited (HIL) on the company's $250m acquisition of one of its rival companies. You are the audit engagement partner for HIL. HIL's Chief Executive Officer has requested you to arrange to include a short article in your audit firm's next monthly newsletter explaining the merits of this take-over to HIL's stakeholders.

Required - Will you include the short article in your audit firm's monthly newsletter? Explain using IFAC Code of Ethics for Professional Accountants.

Reference no: EM133073517

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