Reference no: EM132875998

Question - You are a manager in Khairul & Co, a firm of Chartered Certified Accountants, and you have taken on the responsibility for providing support and guidance to new members of the firm. Khairul & Co has recently recruited a new audit junior, Aishah, who has come across several issues in his first few months at the firm which she would like your guidance on. Aishah's comments and questions are shown below: I also worked on the audit of Noh & Co, where I heard the managing director, Idris, discussing a potential new business opportunity with the audit engagement partner. Noh & Co is an event's organiser, and is planning to run a programme of nationwide events for accountants, at which speakers will discuss technical updates to financial reporting, tax and audit regulations. Idris proposed that our firm could invest some cash in the business opportunity, supply the speakers, market the events to our audit clients, and that any profit made would be shared between Khairul & Co and Noh Co.

Required -

a. Explain in detail what would be the implications (based on ethical principal) of Khairul & Co considering this business opportunity?

b. Discuss the differences between the principles-based approach and also rules-based approach.

c. Explain the FIVE fundamental principles of professional ethics and relate it to the scenario as above.

d. Explain briefly your understanding on "conflict of interests" and is there any conflict of interest situation in the above scenario. Justify your view.