7. A chartered accountant in public practice may not take custody of cash belonging to a client until he has satisfied himself that the money does not come from illegal sources. 8. A chartered accountant in public practice may accept gifts from a client provided the approval of SAICA is obtained prior to the gift being accepted. If the gift "is clearly insignificant" the approval need not be obtained. 9. If a chartered accountant in business is faced with a situation where his compliance with the fundamental principles of the Code of Professional Conduct conflicts with the interests of the company which employs him, he must comply with the fundamental principles. 10. Where a chartered accountant in business owns shares in the company which employs him, a self interest threat which could threaten his compliance with the fundamental principle of objectivity, could arise. 11. In terms of the Code of Professional Conduct, if an audit client has a tight reporting deadline, the engagement partner may assign members of the audit team to assist the client's accounting personnel to prepare supporting schedules, carry out debtors and creditors reconciliations, and approve final journal entries to ensure that the reporting and audit deadlines are met. 12. In terms of the Code of Professional Conduct, provided the audit firm's personnel do not make any management decisions on behalf of the client, members of the audit team may assist an audit client in implementing "off the shelf" (packaged) software. 3.8 (25 marks 30 minutes) 1. Whilst it is clear that all chartered accountants, whether they are in public practice or business, are required to comply with the fundamental principles of the Code. Chartered accountants in business are not required to apply the conceptual framework. 2. The fundamental principle of objectivity applies to a chartered accountant but only when he is on an assurance engagement. 3. Provided an auditor is independent in mind, he need not be independent in appearance. 4 For the purposes of the COPC, the immediate family of a chartered accountant in public practice consists of 4.1 the spouse 4.2 dependents. 5. Carter Repson, a chartered accountant in public practice, is not in breach of the Code if he takes a loan from Peoples Bank, a registered financial institution, of which he is the audit engagement partner. 6. Lolly Patrick has recently been appointed the advertising manager of Homeware Hut (Pty) Ltd. Her husband Peter Patrick is the auditor of the company. Peter Patrick is, as a result, automatically in breach of the independence requirements of the COPC. 7. Desai and Co - Registered Auditors (and chartered accountants) wish to advertise their services on television during the evening "soap opera" period. They are permitted to do so. 8. A chartered accountant who replaces another chartered accountant as the auditor of a company must determine whether there are any professional reasons for not accepting the engagement. 9 Chivanga and Cohen are about to be replaced as auditors of Provincial (Pty) Ltd, by de Villiers