(c) Pinzon, a limited liability company and audit client, is threatening to sue your firm

(c) Pinzon, a limited liability company and audit client, is threatening to sue your firm in respect of audit fees charged

for the year ended 31 December 2004. Pinzon is alleging that Bartolome billed the full rate on air fares for audit

staff when substantial discounts had been obtained by Bartolome. (4 marks)

Required:

Comment on the ethical and other professional issues raised by each of the above matters and their implications,

if any, for the continuation of each assignment.

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

(c) Threatened legal actionEthical and professional issues■ An advocacy threat has arisen as Bartolome and Pinzon are in opposition concerning the fee note for the 2004 audit.■ If Pinzon’s allegations are true this may cast serious doubt on the integrity