Find Related Questions by Tags, levels, etc.
Your audit firm, Adjaye-Gyamfi & Co. has just taken on a new client, Ablordey Ltd (Ablordey), a very successful health club that provides gym and fitness services. The company operates a chain of fitness centers with a wide range of workout equipment, solarium rooms, fitness sessions, nutritional planning, changing rooms, and locker facilities.
You have just been informed that your firm has received an invitation to tender for the audit of the company that owns Gyms Ltd., a major competitor of Ablordey. The Managing Director of Ablordey, Kusiwaa, is an old college friend of your audit manager, and it was through his connection that your firm was able to tender for its audit. You have been assigned as senior auditor for Ablordey.
On a recent visit to your office, Kusiwaa stated that she would like to extend an offer that all staff of Adjaye-Gyamfi & Co. would be eligible for a special membership rate, which is 50% of standard membership rates and entitles the member to 75% off special classes.
She proposed that you sit on the board of directors at Ablordey as a non-executive director. Additionally, she proposed that your firm confirm, as part of the audit, the figures on an insurance claim to be submitted in respect of damage caused by a burst water pipe. The pipe burst during a spell of cold weather in the main gym area prior to the year-end.
Required:
In the context of the above scenario: i) Evaluate FOUR (4) ethical threats (real or perceived) which may affect the independence of your firm’s audit of Ablordey; and (4 marks) ii) For each threat, recommend how it might be eliminated or mitigated to a satisfactory level. (6 marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Your audit firm, Adjaye-Gyamfi & Co. has just taken on a new client, Ablordey Ltd (Ablordey), a very successful health club that provides gym and fitness services. The company operates a chain of fitness centers with a wide range of workout equipment, solarium rooms, fitness sessions, nutritional planning, changing rooms, and locker facilities.
You have just been informed that your firm has received an invitation to tender for the audit of the company that owns Gyms Ltd., a major competitor of Ablordey. The Managing Director of Ablordey, Kusiwaa, is an old college friend of your audit manager, and it was through his connection that your firm was able to tender for its audit. You have been assigned as senior auditor for Ablordey.
On a recent visit to your office, Kusiwaa stated that she would like to extend an offer that all staff of Adjaye-Gyamfi & Co. would be eligible for a special membership rate, which is 50% of standard membership rates and entitles the member to 75% off special classes.
She proposed that you sit on the board of directors at Ablordey as a non-executive director. Additionally, she proposed that your firm confirm, as part of the audit, the figures on an insurance claim to be submitted in respect of damage caused by a burst water pipe. The pipe burst during a spell of cold weather in the main gym area prior to the year-end.
Required:
In the context of the above scenario: i) Evaluate FOUR (4) ethical threats (real or perceived) which may affect the independence of your firm’s audit of Ablordey; and (4 marks) ii) For each threat, recommend how it might be eliminated or mitigated to a satisfactory level. (6 marks)
Find Related Questions by Tags, levels, etc.
Elevate your professional expertise across key business domains with our comprehensive training programs
Follow us on our social media and get daily updates.
This feature is only available in selected plans.
Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.
If you’re not subscribed to a plan, click on the button below to choose a plan