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Auditing assurance services ii ubaf 2144ukaf2124

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AUDITING & ASSURANCE SERVICES II UBAF 2144/UKAF2124assurance service to an audit client, a self-interest threat might still be created.Scenario QuestionsQuestion 1Aventec International Bhd, a listed company, manufacturers and wholesales a widevariety of products including fashion clothes and audio-video equipment. The company isaudited by Voon & Associate, a Public Accounting Firm, and the audit manager is DannyHo. The following matters have arisen during the audit of the group’s financial statementsfor the year ended 30 June, 2019 whichis nearing completion:(1)During the annual physical count of fashion clothes at the company’s principalwarehouse, the audit staff attending the count were invited to purchase any itemsofclothing or equipment at 30% of their recommended retail prices.(70%discount)-Section 420 (Gifts and Hospitality)(2)The chief executive of Aventec International Bhd, Dato Ang, owns a private jet.Dato Ang invoices the company, on a monthly basis, for that proportion of theoperating costs which reflects business use. One of these invoices shows thatDanny Ho was flown to Florida in September 2018 and flown back two weekslater. Neither Aventec nor Voon & Associate have any offices or associates inFlorida.RequiredDiscuss the ethical issues raised and the actions which might be taken by the auditorin relation to these matters.(Adapted from the Association of Chartered Certified Accountants)Scenario (1) Offer of goodsAt the inventory count, the auditors attending were invited to purchase inventory at 30% ofRRP, that is, at a 70% discount.MIA BY LAW -S 420R420.3 A firm, network firm or an audit team member shall not accept gifts andhospitality from an audit client, unless thevalue is trivial and inconsequential420.3 A1 Where a firm, network firm or audit team member is offering oraccepting an inducement to or from an audit client, the requirements andapplication material set out in Section 340 apply and non-compliance with theserequirements might create threats to independence.420.3 A2. The requirements set out in Section 340 relating to offering or acceptinginducements do not allow a firm, network firm or audit team member to acceptgifts and hospitality where the intent is to improperly influence behavior even if thevalue is trivial and inconsequential.Value Trivial & Inconsequential?.

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