25.

A) Auditor’s independence:
- provide an independent audit report – relied on by many stakeholders –
need to show they are objective driven
- Avoid any conflict of interest – self interest threats – do not want
auditors to be biased when making decision – eg - if an auditor has
shares in the company
- ethical requirements – for auditors to be independent – profession – if
not- consequences
- increase sh confidence

threats
1. Partner who has been a client for 8 years – familiarity threat – aware
of the client – may want to keep the client happy in order to get the
engagement renewed next year – biased
2 partner and the FD – friemds from university – familiarity theat –
sympethatic – may not want to upset the client – ignore important
aspects relating to the audit
3 important client – provide non audit

b)
employee-
 Accountable to the audit partner
 Follow the principles set by the firm
 Interest of the firm – earning fees
Accountant-
 Accountable to the professional body
 Follow the fundamental principles
 Interest of the professional body – being independent – integrity
Similarity-
She is accountable to – difference
ii)
 Deal with the audit partner – not objective
 Affect her job – audit partner is mainly thinking about the fees
 Duty to act in the interest of the public – compromising the
fundamentals principles.

3) RDC
Shareholders: considered – route A has a higher NPV – profitable –
maximise SH wealth
Government – obtained permission. not breaking laws – considered
Protection of this jobs – employees at the farm
RDC’s employees – employees are offered a higher pay but they need
to let go of the working hours
Environment – impacted

b)
impact investment-
government
employees – strike – disruptive activities
mr krul – legal action
society – Bbad reputation, affect the survival of the company.

26)
- required to comply with many regulation – consequence – fines
- IA can ensure that companies have complied with the relevant
regulations
- IA review systems
b) AC comprises of water engineers - should not be the case – no
exoerience with the financial elements
All neds are recently retired ED
Ea firms is not independant

ii)
- avoid any independence issues of IA not being threatened to do
their jobs properly
- bod sets the stratwgies AC can set the scope of the IA’s work
based on the strategies
c) shareholders can rely on the financial statements
reduce fraud & ERROr

could improve the way the business is run

documentation – audit trails – easy to trace back incase there are any
issues.

10) LUM
24/11/2022

JGP

Sustainbility – meeting the needs of the present

FD-

- misunderstood the situation

- financial sustainability and not the imact that jgp will have on the
environment
- what the fd fails to understand is that the environmental
sustainability can be linked to financial sustainability

Stages in environmental audit

1. agree the metrics – what needs to be tested
setting benchmarks – which standards to use (ISO 14001)
first time- time consuming - no expertise – not to be aware of what
bench marks to set
2. Measuring performance – areas selected are compared against
the metric
Subjective information – difficult to test – experts in – expensive
Emissions – quantifiable
Employees environmental awareness
3. Reporting-
Annual report / separate report – where?
How transparent – possibility that JGP will not disclose all the
information
 Impact the business has on the environment
Inputsconsume-rm
Outputsemissions, pollution

Impact that the environment has on business – natural disasters –

operational issues.

Strategic – leak
1. Water- used by the local community – impact the society-
disrupt the activities
2. 65% of labour – local community – strike – decide that they
don’t want to work of jgp
3. Fines – huge – liquidity
4. Legal implications
5. Investors could leave
6. Nature of the business

34.

P&J

Strategic risk

- 60% of the business is reliant on the X32

- 60 years of experience – difficult for them to diversify
- Ways to fix the issues that are not feasible for the company –
affect the survival of the company
- Community development will stop – impact the reputation
- Legal actions against the company – increase their financial risk
 - Harmful substances – fined imposed
- Redundancy implications – 45000

TOMATO BANK

a)
- Agreed to generous pension amount – shud be based on no. of
years of service. – based on the basic pay – RC agreed to a high
amount which the other ed are entitiled
- Rc received a letter from mr woof – reacted