A Chartered accountant receives about 40% of his total audit fees from a singleclient. Discuss how it could affect independence of Chartered accountant asauditor of this client. What are such types of threats referred to as

Suppose you have just joined an office of an accounting firm, MC Partners, that provides audit and various types of non-audit services to its clients. Within a few months of joining, you discover four pieces of information regarding one particular office client, Davey International, that could present severe threats to auditor independence. You know of the conceptual framework of the Code of Ethics that guides auditors on identifying threats to auditor independence. Required Identify the most significant threat to auditor independence likely to arise from each of the four pieces of information, summarized below. Explain your reasoning: The office earns 80 percent of its total office revenue from providing several lucrative types of non-audit services to Davey International. (1.5 marks) The taxation division of the office provides tax planning services to Davey International to increase Davey’s tax savings. The resulting tax strategies significantly affect financial reporting, including estimates of income taxes. The audit division of the office does not have significant expertise in taxation and has traditionally consulted senior staff in its taxation division to evaluate the quality of tax reporting in clients. (1.5 marks) The senior managing partner of the office met with parliamentary staff assisting government lawmakers. During this meeting the partner promoted the use of language in an upcoming bill proposing amendments to legislation that would favor the business interests of Davey International. (1.5 marks) The audit engagement teams typically interact significantly with the Chief Financial Officer (CFO) in their client firms. A long-serving and highly-respected audit partner left his position at MC Partners three years ago and recently been appointed as the new CFO of Davey International. (1.5 marks)

.Question 3How is auditing related to accounting?

Describe THREE situations in which the integrity of a professional accountant may be threatened.

If a member of the audit team, a member of that individual’s immediate family, or a firm has a direct financial interest or a material indirect financial interest in the audit client then: A. The auditor would have to hire outside auditors to help in the audit. B. The self-interest threat created would be so significant that no safeguards could reduce the threat to an acceptable level C. The auditors should not participate in the audit, but only act as supervisors D. The auditor may have to create new safeguards to counteract the threat.

Which of the following situations is  a potential self-interest threat?Group of answer choicesAn audit partner of a listed audit client has been invited to attend the Rugby Seven's tournament in England by a director of the client.The audit team is preparing to carry out its 2021 audit for Company ABC and the audit client management wanted to meet the entire audit team.The audit partner owns a some shares in Qantas as part of their superannuation portfolio.The audit client has asked the audit partner to attend a meeting with the Australian Taxation Office, who are questioning the client's Taxes Paid last year.