You are an audit manger in Tigger & Co,a large audit firm which specialise in the audit of car manufactures.The firm current audits Winnie Co . Winnie's main competitor, Piglet Co, has approached Tigger & Co act as auditor. The audit engagement partner for Winnie has been in place for approximately six years . Winnie has approached Tigger & Co to provide internal audit services as well as the external audit. They have suggested that the external audit fee should be renegotiated with at least 20% of the fee being based on the profit after tax of the company as they feel that this will align the interests of Tigger & Co and Winnie. 1. Which of the following statements is FALSE in respect of the audits of Winnie and Piglet?
A.
Tigger & Co will have a good understanding of the car manufacturing industry making them a good choice of firm for both companies
B.
Winnie and Piglet may be concerned that commercially sensitive information may be disclosed by Tigger & Co to their competitor
C.
Tigger & Co must ask permission of ACCA before accepting the audit of Piglet
D.
Tigger & Co must obtain consent of both clients before continuing with the engagements