Problem: Consider the following independent situations:
a) Keira Knight, sole proprietor of an audit firm, plans to establish a separate business that will provide management consulting services. She intends to operate both businesses simultaneously.
b) Warren Brown is the partner-in-charge of the audit of Cedar Ltd. Over the years, he has become a golfing buddy of Cedar's CEO, Craig Phillips. During the current year, Warren and Craig jointly purchased an exclusive holiday house on the Gold Coast. The holiday house represents more than 10 per cent of Warren's personal wealth.
c) Leah White, sole proprietor of an audit firm, has provided extensive advisory services for her audit client Grace Furniture Ltd. She has interpreted financial reports, provided forecasts and other analyses, counselled on potential expansion plans and counselled on banking relationships.
d) Garbo & Associates recently won the audit of Unique Fashions Ltd (UFL), a large manufacturer of women's clothing. Ken Greenland, one of the partners in Garbo & Associates, had a substantial investment in UFL prior to bidding on the engagement. In anticipation of winning the engagement, Ken placed his UFL shares in a blind trust, where he would not know what action the trust had taken with regard to any shares or other investments.
e) Barry Smith, a sole practitioner, audited Galaxy Lights Pty Ltd's financial report for the year ended 30 June 2022, and was issued shares by the client as payment of the audit fee. Barry disposed of the shares before commencing fieldwork planning for the audit of the 30 June 2023 financial report.
REQUIRED: For each situation, determine whether the Code of Ethics for Professional Accountants has been breached and explain your answer.