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i)International Ethics Standards Board for Accountants has produced the Handbook of the International Code of Ethics for Professional Accountants.

Required Explain any 3 of the fundamental principles of professional ethics for Accountants.( 9 marks)

ii)G 3 a small security firm would like to get a loan from Zambia national Commercial bank (Zanaco). Zanaco has requested that G 3 needs to submit audited financial statements in order to get a loan however G3 has no audited financial statements. Your friend John the accountant at G 3 knows that, you and your other friend David Mulenga a Chartered Accountant owns a small tax practice firm in Lusaka. John has emailed you asking if you and your friend David Mulenga would be interested in performing the audit of G3. G3 is on a tight deadline from the bank and would like the audited statements within 2 weeks. Your tax practice firm has never performed an audit for any client previously.

Required:

With reference to the Code of Ethics for Professional Accountants write a letter in response to John the accountant for G 3.

iii) Dunlop is one of the audit clients, for PWC. Dunlop has not paid its audit fees for two years despite numerous discussions between management and the audit partner, Mr Moono . Management has promised that the fees would be paid before the audit report for this year was issued. Mary the audit manager rang Mr Moono this morning to ensure that the audit report for this year was not issued because Dunlop Ltd had paid only 10 per cent of the outstanding amount. She discovers that Mr Moono is about to sign the audit report.

Required:

Using the Conceptual framework of ethical judgment process advice on what the audit firm should do in this situation.

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