Explain the ethical guidance

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Reference no: EM13556219

Andrews, a firm of Chartered Certified Accountants has 20 partners and 87 audit staff. The firm provides a range of audit, assurance, tax and advisory services. The firm has four offices around the country and clients ranging from sole traders to a number of small plcs (none of which are quoted companies).The quality control partner has recently resigned to take up a position in industry. He has not yet been replaced as the managing board of Andrews have not been able to find a suitable replacement. On his departure the quality control partner was in the process of implementing a system of ethical compliance for assurance staff. Staff would be required to confirm in writing their compliance with ACCA Code of Ethics. Implementation of this system is incomplete.

Osbourne plc is one of the firm's largest clients for whom Andrews provides audit services, preparation of tax computations and other advisory services. A new engagement partner has been assigned to the audit as the previous partner has retired. The fee for the audit work and other services has been set at the same level as last year in spite of the fact that additional work will need to be performed as Osbourne has introduced a new computer system. The starting date of the audit has been delayed due to problems with the new system. The management of Osbourne was very insistent that the fee should not be increased because of this.

Required

1. List the six elements of a firm's system of quality control identified by ISQC 1.

2. Identify and explain the quality control issues in the scenario above and the action which should be taken by Andrews.

3. Explain the ethical guidance in respect of the setting of fees for assurance services.

Reference no: EM13556219

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