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“Such a threat would be so significant that no safeguards could reduce the threat to an acceptable level. It follows therefore that the audit team member should not accept such a loan or guarantee. ”
maam even if the loan obtained by Stott is not on commercial lending terms, a safeguard can be easily applied like removing Stott from the audit team responsible for auditing turner co. So then why is the above statement suggesting that no safeguard can be applied?
Because the Code says so – there are few outright prohibitions – and this is one of them. Please see the EXAMPLES in Chapter 4 of the notes.