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Question 2 An independent in appearance and in mind are important to the auditors. They...

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Accounting

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Question 2 An independent in appearance and in mind are important to the auditors. They should not compromise the auditors' professional judgment, thereby allowing auditors to act with integrity, exercise objectivity and professional skepticism. Consider the following: (i) A member of the assurance team has his sister-in-law who is the officer of the assurance client. (ii) Offering of a loan by client (financial institution) which does not appear to be an arms-length transaction. (iii)The officer of the assurance client resigned from his work and currently works as a member of the assurance team. (iv) Undue dependence on total fees from an assurance client. The client is a major customer of the audit firm. (v) Changing a sample during observation of stock-take as the initial sample chosen is located remotely. Required: For each of the scenario above, (a) Outline the possible principles of ethics affected and the threats to independence. (10 marks) (b) Identify the possible measures that could be implemented so as not to compromise independence. (15 marks) (Total: 25 marks) Present your answer for (a) \& (b) in this format

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