You are an audit manager with Clarke & Johnson (CJI). For the past years CJ has been the auditor of...

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You are an audit manager with Clarke & Johnson (CJI). For the past years CJ has been the auditor of luxury Travel Holidays LTD (LTH), a travel company. Geoff, the audit partner, has asked you the to contact Chris, LTH’s CEO, with a view to CJ being re-engaged as the auditor for the upcoming audit of the 30 June 2015 financial report. Geoff has also indicated that intends to allocate Michael, a first-year accountant, and Annette, an accountant in CJ’s tax advisory department, to the LTH audit for the first time. Geoff suggested that you discuss the audit with each of these staff, with a view to identifying any independence issues. You held talks with Chris, Michael and Annette of these conversations were as follows:

David · Accepted Answer

Running Head: Audit Analysis
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Threat is related to auditor independence in each excerpt 
Excerpt 1
Conversation with Chris
There is a threat in the message given by Chris, since the board of directors in LTH wants my audit partner, Geoff to give a speech promoting the LTH’s business at the next travel agency; Chris has passed a message of intimidation by stating replacement of Geoff and CJ auditing services if my partner Geoff refuses to give the speech in the LTH travel agency. This poses a threat to our independent operations if we accept with the threat given.

You are an audit manager with Clarke & Johnson (CJI). For the past years CJ has been the auditor of luxury Travel Holidays LTD (LTH), a travel company. Geoff, the audit partner, has asked you the to...

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