You have been in partnership with a fellow Certified Public Accountant for a number of years. Due
Question:
You have been in partnership with a fellow Certified Public Accountant for a number of years. Due to old age and ill-health your partner has suddenly resigned.
Unfortunately, some of the clients of your practice have also suddenly left you, thereby leaving you with few personal clients and only one large client which, on departure of your partner, will represent 30% of your total audit fee income.
While reviewing your business plan and your ethical position, you realise that in order to make the practice profitable and viable you will need to expand your client base considerably.
Required:
a) In the light of the Accountant's Act (Cap.531) and the Ethical Guidelines issued by the Institute, state with reasons whether you will have to resign as auditor of the large client.
b) Outline the actions which are specifically prohibited by the Ethical Guidelines for a practice which wishes to bring in more clients.