Consider the following situations:

(a) Assume that you are a partner in a two partner practice with total practice income of £250 000. One of your clients

(a private limited company with a turnover of £10 million and with some 80 employees) pays ongoing fees to you amounting in total to £35 000. Do you think that your independence might be threatened? What steps would you take in a situation like this?

(b) Assume that you are a partner in charge of an office of your firm. You are engagement partner of a major client whose fees of £150 000 represent 2 per cent of the total gross practice income of your firm, but 20 per cent of the income of your office. Consider the implications in the light of the IFAC Code and FRC Ethical Standard.

(c) Assume that you are a partner with a number of clients for whom you are personally responsible. One of these clients is much larger than the others and you have to spend about 40 per cent of your time on the assignment. The fees receivable represent about 4 per cent of the gross practice income of your firm.

Your own income is not based on fees receivable from this client. Consider the implications of this situation.