Evaluate Breaches to the Code of Ethics

DEF Inc. is the audit client of ABC Inc. ABC Inc is a firm engaged in audit assurance provision, taxation advisory and corporate finance advisory. Recently, ABC Inc conducted a recruitment exercise on behalf of DEF Inc for the position of Chief Financial Officer. The recruitment process was not supervised by DEF Inc. till the final selection of the candidate was announced by ABC Inc. ABC Inc. has been contracted to provide audit assurance services, of DEF Inc, for 2018 financial year.

Also ABC Inc. is currently engaged in a joint venture with DEF Inc. with regards to the provision of consultancy services to the Federal Government. The joint venture constitutes a material effect of the financial statements.
Under the scenario described, identify any ethical shortcomings that would hinder the provision of audit assurance, by ABC Inc., to DEF Inc.

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