ACCA · Question 03 · Audit and Assurance
CASE 1: AQUAPURE UTILITIES CO
AquaPure Utilities Co is a listed water treatment company. Your firm, Stream & Co, has been the auditor for 6 years. The audit engagement partner, Sarah Jenkins, has been in place for the entire 6 years. AquaPure has requested Stream & Co to provide internal audit services regarding their new environmental compliance system. The Finance Director of AquaPure recently offered the audit team a weekend stay at a luxury spa resort owned by the company. AquaPure's audit committee consists of three executive directors and two independent non-executive directors.
QUESTION:
Which of the following best describes the ethical implications of the Finance Director's offer of a weekend stay at a luxury spa resort?
Answer options:
It creates an intimidation threat and should be reported to the regulatory authorities.
It creates a self-interest and familiarity threat and must be declined as the value is not trivial and inconsequential.
It can be accepted provided the audit team pays a nominal fee to the company.
It can be accepted as it is a standard business courtesy in the utilities industry.
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