M & H Chartered Professional Accountants is a Milton basedaudit firmowned by six partners. Assume you are one of the partners at M & H Chartered Professional Accountants (audit firm), and you are dealing with various situations in relation to your firm's audit clients.

You are about to sign engagement letters with the following clients for the audit of financial statements.

Situation 1 - EC Ltd.Your firm has recently completed the project of designing & implementation of accounting & bookkeeping system for your client EC Ltd.

Situation 2 - FD Ltd.The chief accountant of FD Ltd (one of your clients) has just been retired and not been replaced yet by the HR. As a result, there is no one heading the accounting department. The financial yearend is approaching in a couple of days. The CEO of FD Ltd has asked you if the senior auditor in the audit team can help him calculate the corporation tax and file the tax return (for which he will pay some extra amount in "cash" to the audit team members.