(A) Dinpaye Limited processes and packages portable water for local consumption. The factory is situated in a valley in

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(A)
Dinpaye Limited processes and packages portable water for local
consumption. The factory is situated in a valley in a first-class
residential area of the city. A major road used by most residents
runs in front of the factory. Often, this road is flooded with
spill-over of water from the factory, thus hindering vehicular and
pedestrian movement. Management of the company on such occasions
uses the services of a contractor to pump out the water from the
road. This situation contravenes the provisions of the Factories,
Offices and Shops Act 1970, Act 328. Dinpaye Limited has engaged
Eagle-Lion & Associates as the auditors. In their preliminary
tour of the factory the senior partners became aware of the
flooding situation in the area. Back in the office the senior
partners consulted ISA 250 “Consideration of laws and regulations
in an audit of financial statements” for guidance on the auditor’s
responsibility to consider laws and regulations in an audit of
financial statements before carrying out the audit assignment.
Required:
(i) State examples of the possible type of information that
might have come to the auditors’ attention that might indicate
non-compliance with the Factories, Offices and Shops Act.
(ii) What the auditors should consider when evaluating the
possible effect on the financial statements for non-compliance with
the law according to ISA 250.
(B)
CashPut & Co., an audit and assurance firm, has been engaged
as auditors for the BfT Bank Ltd, a public limited liability
company for some time now. BfT Bank has sixty branches throughout
the country and branches in Mali, Burkina Faso and Nigeria. The
Bank is one of the Banks in the country which can boast of large
landed properties. CashPut & Co. receives about 20% of its
income from this particular client. Before last year’s audit, the
bank engaged the audit firm to value its Land and Buildings in all
its branches and headquarters. This work was executed by the audit
firm and a report has been issued to management. The report has
been incorporated in this year’s financial statements to be audited
soon. CashPut & Co. sees BfT Bank Ltd. as a very important
client whose works are always executed with dispatch.
Required:
(i) Identify and evaluate the significance of any threats to the
Code of Ethics for Professional Accountants raised in the case.
(ii) Recommend safeguards to eliminate the threats
(mentioned in (i) above) or reduce them to an acceptable
level.