Identify two ethical issues arising

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Reference no: EM133265564

Your firm, Audit Co (Audit) is the external auditor of Logistics Ltd (Logistics), a company that provides distribution and warehousing services.
Mark Riches, the finance director of Logistics just called Diane Edwards and requested that the audit of the company's financial statements for the year ended 30 September 2022 be completed by 30 November 2022. Diane has been the manager responsible for the external audit of Logistics for the last six (6) years.

Logistics is interested in increasing its overdraft facility but the bank is not willing to review the facility unless they have access to the latest audited financial statements.

Mark also notified Diane that he will be retiring in January 2023 and that the board of directors is interested in recruiting Diane as his replacement since she is well aware of how the company operates. Diane agreed to meet Mark and discuss this in detail, as she is interested in taking over Mark's position.

Logistics generates 90% of its revenue from customer contracts that are being renewed every three (3) to five (5) years. All customer orders are placed online. After the order is placed and once Logistics provides the services, it invoices the customer who has to pay within 30 days. Logistics generates 35% of its revenue from a single customer, OnTime Shipping (OnTime). The contract with OnTime is due for renewal in February 2023.

Land and buildings were last valued (using the revaluation model) by chartered surveyors in August 2022. Logistics uses its own vehicles that are serviced and repaired by QuickRepair Ltd. The managing director of Logistics has a controlling interest in QuickRepair Ltd. During the year ended 30 September 2022, Logistics funded the replacement of a few of their older vehicles by borrowings.

Required:
Identify two (2) ethical issues arising from the information provided and any safeguards you consider appropriate to address each issue

Reference no: EM133265564

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