Required:
Explain why Tania should have reservations about accepting the engagement in respect of the linear accelerators. Make appropriate reference to fundamental ethical principles in your answer.
The fundamental principles of professional ethics include integrity (being straightforward and honest), objectivity (not allowing personal feelings or prejudices to influence professional judgment), professional competence and due care (maintaining knowledge and skill at an appropriate level), confidentiality (not sharing information that is learned at work), and professional behaviour (upholding the reputation of the profession).
The CEO of TCSL has requested the auditor provide an opinion that the linear accelerators are fit for use without charging a fee as a gesture of goodwill, in the context of the future negotiations about the audit tender. There is an implicit invitation to provide a favourable opinion to ensure that the audit tender is awarded to Fellowes and Associates again.
If Tania provides the opinion without obtaining appropriate and sufficient evidence she would be compromising her integrity because the favourable opinion would not be honest, and her objectivity because her professional judgement would be influenced by the desire to win the tender again. There does not seem to be any threat to confidentiality, although her professional competence and behaviour on this particular engagement would be compromised because she would not be exercising her skill at an appropriate level (and she may not be qualified to provide the opinion on the accelerators) and her actions could damage the profession’s reputation.
Accepting an engagement without appropriate remuneration is also likely to create a conflict of interest. Fees should reflect the work involved and be set at a level that ensures that adequate staffing are assigned to the engagement and sufficient work done to complete the engagement.