Ethical matters

Up to 1 mark for each relevant comment:

– Explain self-interest threat arising on bonus suggestion
– Significance depends on seniority of person, materiality of compensation
– Partners may not have this arrangement
– Safeguard could be put in place for other audit team members
– Explain self-review threat arising on internal audit service
– Identify impact on professional skepticism
– Explain management threat arising in internal audit service
– Safeguards (1 mark each), e.g. separate team
– Not allowed for public interest clients
– Separate engagement letter/billing arrangements
– Approval of those charged with governance

Maximum marks 8