4  Cobra & Co
  Generally up to 1½ marks for each well explained matter and 1 mark for each well explained and relevant response to the matters identified.
  Note: Only ½ mark will be awarded for brief identification of a matter. Further marks will be awarded for explaining why the threat/matter is relevant in this specific context. Likewise only ½ mark will be awarded for brief response. Only well explained responses should score a full mark.

(a)  Asp Co
   –  Self-review threat due to financial statements impact of other services
   –  Not prohibited because Asp Co is not listed
   –  Use different teams and make sure that this is possible and acceptable to client (max 1 mark)
   –  Potential management threat
   –  No safeguards available for management threat relating to an audit client
   –  Communicate management threat issues with management and potentially obtain new engagement letter (max 1 mark)
   –  Second partner review of audit for 31 July 2017 (max 1 mark)

Maximum marks  7