Generally, up to 1 mark for each well explained point:

(a) Rivers plc
 – Long association of audit partner breaches the FRC Ethical Standard’s five-year maximum period allowed
 – Self-interest threat identified and explained
 – Familiarity threat identified and explained
 – Recommend replace Bob with a new audit partner as soon as possible
 – Firm’s monitoring of the length of time partners act for clients seems deficient
 – Audit partner should have spent more time on the audit and in particular on the final review
 – The total amount of time spent on the audit appears low for the audit of a listed company – implications for audit quality
 – Inappropriate delegation of tasks, the junior audit manager lacks experience
 – There may not be sufficient, appropriate evidence to support the audit opinion
 – Welford & Co may have provided a prohibited non-audit service to Rivers plc, a listed company
 – The size of fee for the non-audit service creates a self-interest threat
 – Bob’s involvement with the non-audit service creates familiarity threats to audit objectivity
 – Lack of documentation could indicate that no work has been performed – possibly a bribe from the client
 – Welford & Co to review policies, procedures and documentation on engagement acceptance
 – Apparent lack of Engagement Quality Control Review being carried out before the audit opinion was issued
 – Inappropriate delegation of work on going concern to an inexperienced audit assistant
 – Sample of contracts reviewed is too small – insufficient evidence obtained
 – Management selection of contracts is likely to be subject to bias – the auditor should select which contracts should be reviewed
 – Insufficient work on going concern – assumptions should be challenged not agreed to prior year
 – Client audit committee – should have identified the ethical and audit quality issues
 – Conclusion

Maximum marks 15