1. Threat to Objectivity and Independence:
   The relationship between Mr. Asare and his wife, who is the Finance Director of an audit client, poses a self-interest threat to the objectivity and independence of the audit. Even though Mr. Asare is not the reporting partner, the relationship may lead to undue influence on the audit work, potentially compromising the audit’s integrity.
2. Ethical Decision by the Firm:
   The firm’s decision to place Mr. Asare on compulsory leave aligns with the ethical standards required to maintain independence and objectivity in auditing. This approach helps to prevent any perception of bias or conflict of interest that could arise due to the close personal relationship.
3. Impact on Firm’s Objectivity:
   By removing Mr. Asare from any involvement with the client during the audit, Fobes Chartered Accountants ensures that the audit is conducted impartially. This action strengthens the firm’s commitment to ethical practices and helps preserve its reputation for objectivity and independence.
4. Public Perception and Compliance with Ethics:
   Ensuring auditor independence is not only about actual threats but also about perceived threats. The stance taken by the partners demonstrates a proactive approach to avoid any doubt or suspicion from external stakeholders, in line with the IFAC Code of Ethics for professional accountants.

Conclusion:
The decision to have Mr. Asare take leave is a precautionary measure to uphold the firm’s independence and objectivity. Even though he was not the reporting partner, the relationship with a key officer of the audit client warranted such action to prevent any potential compromise to the audit’s integrity.

(3 marks)