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The first scenario is: An auditor team has been partner with CKT Ltd for over 20

years. The client has a reputation for producing very high quality accounts.

Being partner on CKT Ltd for over 20 years might means that the audit team
might have established a very close relationship with their clients. This might
lead to the threat of Familiarity where the auditor is too sympathetic to the
clients interest or trust the client too much because of their close relationship.
Familiarity can prevent auditor to meet Objectivity, which is one of the five
fundamental principles listed in Code of ethics for accountants, where they have
an obligation not to compromise their professional or business judgement
because of bias, conflict of interest or the undue influence of others. In this case,
bias might happen as auditing team might think they have known their partner
so well and assuming accounts provided by their clients are all high quality that
they neglect possible misstated information from the clients financial statement.
Their auditing process therefore, would not able to ensure that any material
misstatement in the clients accounts are corrected and the accounts therefore
wouldnt be able to provide a true and fair view of the company financial
situation.