Required:

Shamsuddin is inclined to accept the above offers. Discuss the options available with him in each of the above situations.

Part (i)
Members of assurance may seek publicity for their services and achievements and may advertise their services & products in any way think fine i) Members may inform the public of the services they are capable of providing by means of advertising that the medium should not refled adverselyon the mambers, ICAPor accountancy profession. ii) Advertisement and prompational material prepared or produced by members or firms should not (either in content or presentation ) a) Bring ICAP into disrepute or bring discredit to the member, firm or the accountancy profession b) Discredit the services offered by other whether by claiming superiority for the members or firms own services or other wise c) Be misleading either directly or by impliacation d) Fall short of the requirement of the UK advertising & sale promotion, notably as to legality, decency, clarity, honesty and truthfullness. iii) Any reference to fees does not misleading the reader as to the precise range of services and time commitment that the reference in intended to cover. iv) Any promotion activities should not amount to harassment of prospective clients v) Commissions fees or reward in return for the introduction of clients are not permitted.

Part (ii)
Fashion limited a private limited company , which has suffred heavily on account of recent financial turmoil, has informed him that it is willing to appoint him in the forth coming annual general meeting of the company in place of the existing auditor, if he can quote a fees below the existing audit fee. Answer In this case (disscussed above) the shamsuddin has a threat of pricing or price cutting Threat Safeguard If a firm (like shamsuddin) has obtained an Audit and assurance engagement at a fee lower Then that charged by thier prodesessor or quoted By other firms low balling or price cutting a Self interest threat is created. the firm must be able to demonstrate that a) appropriate time & quality staff have been Assigned & b) All applicable standards are being complied with

Part (iii)
Design limited has contacted shamsuddin and informed him that they are willing to appoint him as their external auditor in the next Agm at a fee of Rs 200,000 if the completes the audit in a month. However in case of delay in the audit work the audit fee will be reduced to Rs 150,000 Answer Under this case the shamsuddin has following threat price cutting(self interest threat) Threats safeguard A fees arrangement under which the amount no safeguard can reduce Of the fees is contigent on the result of the these threats to an audit work creats self interest and advocasy threats acceptable level.

Part (iv)
Before accepting the from style enterprisea shamsudin should evaluate the followings a) Before accepting audit engagement the auditor must i) Ensure the firm is independent ii) Ensure the firm is competent iii) Ensure firms resources are adequate to sarvices clients needs i.e adequate staff expertise and time. iv) Obtain references in respect of the clients v) Asses the risk attaching to the client vi) Communicate with present auditor b) Rules of proffessional conduct statement change in proffessional appointment i) Obtain clients permission to communicates with present auditor ii) If refused decline nomination iii) If permission granted, write may help decision whether to accept engagement c) After accepting engagement or nomination i) Ensure outgoing auditors removal resignation properly conduct in accordance with national regulation or country laws ii) Ensure new appointment properly conduct & send out an engagament letter to the directors.