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Question 4b

You are a manager in Monet & Co, a firm of accountants which has 12 offices and 30 partners, 10 of whom are members of ACCA. As an expert in ethics and professional conduct, you have been asked to advise the partners on the following issues, which were raised at a recent meeting.

(b) The planning for the audit of Renoir Co’s financial statements for the year ending 31 March 2016 will commence shortly. In preparation the audit partner telephoned Renoir Co’s finance director, Jim Cassatt, to set up a planning meeting and to remind him that fees relating to a tax engagement from the previous year were still outstanding.

Mr Cassatt raised concerns about the conduct of the previous audit, stating numerous examples of when he and his staff had been interrupted when they were busy. He stated that he wanted guarantees that this year’s audit will be more efficient, less intrusive and cheaper, otherwise he will seek an alternative auditor. (7 marks)

Required:
Evaluate each of the issues described above, commenting on the ethical and professional issues raised and recommend any actions necessary in response to the issues identified.

Note: The split of the mark allocation is shown against each of the issues above.