正确答案： (c) Software Supply Co Here it seems that Smith & Co has referred the provision of bespoke accounting software to an external provider – Software Supply Co, and that a commission is being paid to Smith & Co for these referrals. It is common for audit firms to recommend other providers to their audit clients. This could be perceived as an objectivity and self-interest threat, as the audit firm is benefiting financially through recommending clients to a particular provider of goods and services. However, if appropriate safeguards are in place, the referrals and receipt of commissions can continue. Action to be taken: – Verification from all personnel involved with the audit of clients to whom Software Supply Co has provided a service that they have no financial or personal interest in Software Supply Co. – Smith & Co must ensure that: For each client where a referral is made, full disclosure has been made to the client regarding the arrangement Written acknowledgement that Smith & Co is to receive a referral fee should be obtained from the client. – Procedures must be put into place to monitor the quality of goods and services provided by Software Supply Co to audit clients.
