This assignment solution addresses the principles of audit independence, covering various case studies and ethical considerations. The document begins by defining audit independence and its importance, differentiating between real and perceived independence, and then analyzes several scenarios where audit independence is compromised. These scenarios involve violations of confidentiality, conflicts of interest, and threats to auditor objectivity. The solution then examines a case where an auditor is approached by a company facing legal challenges, emphasizing the auditor's responsibility to assess risks and maintain professional skepticism. Further, the assignment analyzes internal control weaknesses in a retail store chain, highlighting issues in cash receipts, credit sales, and reconciliation processes. The solution offers insights into how these weaknesses can impact financial reporting and suggests improvements to strengthen internal controls. Finally, the document underscores the importance of auditor integrity and adherence to ethical codes, providing a comprehensive understanding of audit independence in practice.