Auditing and assurance revision question and answer

Auditing and Assurance Revision Questions and Answers

Comment on the following situations/statements.

a) A firm or a member of the audit team accepts gifts or hospitality of which the value is not trivial and inconsequential. (Give your answer on the basis of the Provision of IFAC Code of Ethics adopted ICAN.)
b) ABC Commercial Bank provided loan to an audit team member under terms and conditions other than normal. (Give your answer on the basis of the Provision of IFAC Code of Ethics adopted ICAN.)
Answers

a) There will be self-interest and familiarity threat to compliance with the fundamental principles which the auditors are required to comply. The threat would be so significant that no safeguards could reduce it to an acceptable level. The firm or the member of the audit team shall not accept such gifts or hospitality. (Students are advised to explain familiarity threat)

b) There will be self-interest threat and the significance of the threat would be so significant that no safeguard could reduce it to an acceptable level. So such loan shall not be accepted. (Students are advised to explain self-interest threat)



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