(d) Ethical matters
Generally up to 1 mark for each point discussed:
– Loan guarantee is a financial self-interest threat
– The loan is material and guarantee should not be given
– The advice on systems would be a non-audit service
– Self-review threat created
– Threat of assuming management responsibility
– Service can only be provided if systems unrelated to financial reporting
– In this case the advice relating to accounting systems must not be given
– Advisable not to provide the advice on management information systems
– Discuss both matters with management/those charged with governance

Professional marks
Generally 1 mark for heading, 1 mark for introduction, 1 mark for use of headings within the briefing notes,
1 mark for clarity of comments made.