Reference no: EM132987357

You are a sole practitioner in public practice in Launceston. Your practice provides a range of services including: tax compliance work; preparation of year end accounts; business advisory services; and some audit engagements.

• For some five years, you had been providing account preparation, tax preparation and business advisory services to Tomahawk River Rapids Pty Ltd (Tomahawk) a small local company who owns an adventure business involving river rafting excursions for tourists. Just a few months ago you lost a tender to provide accounting and advisory services to Tomahawk for the next five years to another accounting firm in Launceston. Leading up to your departure, as the public accountant of Tomahawk, you were advising the company on the potential purchase of another business (Gladstone Paragliding).
• Since losing Tomahawk as a client you have however acquired another client, Cameron Mountain Mountain Biking Pty Ltd (Cameron), a company involved in adventure mountain biking. At the initial meeting with Cameron, you become aware that they are also bidding on the purchase of Gladstone Paragliding. Cameron is aware of another bidder for Gladstone Paragliding, but is unaware of whom that bidder is. They are also unaware that you were also the former public accountant of that competing bidder (i.e. Tomahawk).
• After the initial meeting with Cameron you begin feeling a little troubled. You want to help your new client and provide a valued service to them. However you also are in possession of confidential information concerning the plans of your previous client Tomahawk, in also wanting to purchase the Gladstone Paragliding business.

Required

Problem 1: Analyse the scenario above in terms of the five fundamental principles of APES 110 Code of Ethics of Professional Accountants, any threats to these fundamental principles and any safeguards that you suggest should be put in place.