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Matthew Damon has been appointed as a junior auditor of Awesome water house Coopers (AwC). One of his first tasks is to review the firm’s audit clients to ensure that independence requirements of APES 110 (Code of Ethics for Professional Accountants) are being met. His review has revealed the following:
(1) AwC has performed the audit of Jamaican Metals Pty Limited (JM), a large proprietary company (NOT public interest entity) for the last two years. AwC has also been providing services related to the preparation of accounting records and financial statements to JM.
Required:
Using the conceptual framework in APES 110 (Code of Ethics for Professional Accountants), identify potential threat(s) to independence & recommend safeguards (if any) to reduce the independence threat(s) identified. Also, provide an objective assessment of whether audit independence can be achieved.
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