(ii) Can we entertain our clients as a gesture of goodwill or is corporate hospi

(ii) Can we entertain our clients as a gesture of goodwill or is corporate hospitality ruled out? (3 marks)

Required:

For EACH of the three FAQs, explain the threats to objectivity that may arise and the safeguards that should

be available to manage them to an acceptable level.

NOTE: The mark allocation is shown against each of the three questions.

(ii) Corporate hospitalityA partner in an audit firm is obviously in a position to influence the conduct and outcome of an audit. Therefore apartner being on ‘too friendly’ terms with an audit client creates a familiarity threat. Other members of the audi