Discuss the following situations in the context of the independence of the auditor, showing clearly the principles involved: i.The audit manager in charge of the audit assignment of GEDA Ltd holds 5,000 ordinary shares (@ GH¢1 each) in the company (total shares in issue – 500,000). The audit partner holds no shares. ii.The total fee income of SAGE & Associates, a local audit firm, is GH¢700,000. The recurring audit fee receivable from Celestial Ltd, a private company is GH¢100,000. iii.The audit partner of an auditing firm is responsible for two audit assignments, Aman Ltd and Silta Ltd. Aman Ltd has recently tendered for a contract with Silta Ltd for the supply of material quantities of goods over a number of years. Silta Ltd has asked the audit partner to advice on the matter.
Discuss the following situations in the context of the independence of the auditor, showing clearly the principles involved:
i.The audit manager in charge of the audit assignment of GEDA Ltd holds 5,000 ordinary shares (@ GH¢1 each) in the company (total shares in issue – 500,000). The audit partner holds no shares.
ii.The total fee income of SAGE & Associates, a local audit firm, is GH¢700,000. The recurring audit fee receivable from Celestial Ltd, a private company is GH¢100,000.
iii.The audit partner of an auditing firm is responsible for two audit assignments, Aman Ltd and Silta Ltd. Aman Ltd has recently tendered for a contract with Silta Ltd for the supply of material quantities of goods over a number of years. Silta Ltd has asked the audit partner to advice on the matter.
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