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the question asks us to comment about the professional,quality control and other issues which arises in relation to the audit of wire company?
relating to the third part of the question the revision kit answer says”Though the threats may be mitigated somewhat by him not being a formal member of the audit team of Wire Co, the fact that Russell helped the audit team (by providing information about the audited entity) means that the threats described above apply in this situation. There is a perception that the audit team is not independent.”
how does providing information about some business development in Wire company by Rusell deter independence of the audit team?and how does all threats apply because of the disclosed information?
I don’t have the question so I’m batting in the dark!
It appears that some “out-sider” has assisted the audit team (in good faith?) by passing on privileged information about the client and the printed solution suggests that this may be seen to have jeopardised the auditors’ independence
Well, yes, I can see that as a valid point. The auditor is meant to reach their own professional opinion based on the work that they have done and the evidence that they have collected
Some additional information passed to then without them having requested that information could potentially be seen to have influenced the auditors’ opinion
But there again surely the answers to circularisation requests could equally well be claimed to be information from outside sources
The difference there, of course, is that the circularisation replies are auditor generated whereas gratuitous information passed from outside without being requested cannot be said to be auditor generated
I don’t know what other threats are quoted in the answer but I imagine they can be viewed as being similarly affected by the impact of this Russell disclosure
Does that do it for you?
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