An audit junior on the audit of Lintel Co inherits shares in Lintel Co. What action is required under the ACCA Code?

Correct answer: B) The junior should dispose of the shares immediately

Explanation

Members of the audit team must not hold a direct financial interest in an audit client, however immaterial. Where an audit team member receives such an interest by inheritance or gift, the Code requires it to be disposed of immediately; if the junior is unwilling to do so, the junior must be removed from the audit team. Materiality of the holding is irrelevant for a direct interest, disclosure in the auditor's report is not a safeguard, and resignation by the whole firm is not required.