Question Carter (6/10)

Found it – deep in the archives!

“could you explain more the ethical threat in gates company who is providing training gate or Crates” (Carter?)

The question clearly states: “This (technical training) is not a service that the firm (Carter & Co) wishes to provide, and it has referred the audit clients to a training firm, Gates Co, which is paying a referral fee to Carter & Co” and the printed solution leaves you in no doubt either:

“Referral fees are not prohibited by IFAC’s Code of Ethics. However, a self-interest threat can arise, as the audit firm gains a financial benefit for each audit client referred to Gates Co. The referrals and payments to Carter & Co can continue, provided that safeguards are put in place. Safeguards could include:

– disclosing to the audit clients that a referral fee arrangement exists, and the details of the arrangement
– receiving confirmation from the audit clients that they are aware of the referral arrangement
– receiving confirmation from all employees of Carter & Co that they have no interest in Gates Co

Carter & Co may also wish to consider the quality of the training provided by Gates Co. Any problems with the training provided could cause damage to the reputation of Carter & Co.”

As for your second question …. I really cannot see what your point is (who / what is “cater”) I see neither intimidation nor self review