Ammar and Aisyah are partners of AMH, a small-sized accounting firm in Ipoh, Perak. The partners are currently in dilemma on how to deal with the following independent situations:

i) B & W Sdn Bhd, which contributes 35% - 40% to the firm's annual income, is a major client of the firm since five years ago. During the current year's audit, major discrepancies were noted relating to material overstatement of the company's revenues as well as non-disclosure of a contingent liability. The management refused to adhere to the financial reporting requirements and threaten to change the auditor if AMH qualifies the audit report.

ii) AMH was nominated to be the auditor for Sugar Bun Sdn Bhd. The management of Sugar Bun Sdn Bhd requested AMH not to communicate with the existing auditor in order to speed up the appointment process.

iii) AMH was nominated to be the auditor for Biker Solution Sdn Bhd. Aisyah, the audit partner, is reluctant to accept the offer as her younger brother is working as a Sales Executive with the company.

iv) AMH plans to appoint Mofaz as a new partner of AMH. Mofaz is a fresh graduate with a first class Bachelor of Accounting (Hons) degree. Mofaz plans to apply for the MIA membership after he obtains the necessary working experience.