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Section A Case Study Question Question 1 ('70 marks) Amy and Billy studied Business Law in university together and became very good friends. After graduation,
Section A Case Study Question Question 1 ('70 marks) Amy and Billy studied Business Law in university together and became very good friends. After graduation, Billy started his own IT business. His company, Intelligent IT Ltd (IIT), was expanding very fast and achieving a huge annual turnover. Amy pursued her career in accountancy and worked hard to become a partner in the Lee & Fung CPA firm. Naturally, IIT became one of the major clients of Amy's firm, contributing 10% of its professional fees. This year, IIT was facing a very difficult position. Apart from losing a few major customers, a significant loss was discovered after Amy's firm completed the year-end audit for IIT. Amy was invited to lunch by Billy. Amy arrived late at the lunch, she told Billy that she was busily engaged with the year-end auditing of a listed company, G&D International (681D). Billy asked Amy whether the rumor about a merger and acquisition deal between G&D and another IT company was true, Amy responded that she could not answer the question because of the confidentiality requirement. They then moved their discussion to Billy's business, Billy told Amy that he was negotiating a big project. If he could successfully apply\"for a $3 million loan with ABC bank to handle the project, IIT's position would turn around. However, he was wonied that if the ABC bank was aware of IIT's loss position, it would not grant the loan. Billy then suggested that Amy use whatever device she could to improve the financial position of his company. Billy further begged Amy to release some 'valuable information' about G&D's merger and acquisition deal to him as he believed that he could make a handsome return from the share trading. Billy promised Amy that she would be duly rewarded after overcoming this hurdle. He would reward her with a yacht club membership to show his appreciation. If Amy refused his request, he had no choice but to appoint another CPA firm next year. Based on the case above, answer the following questions: (a) Identify the ethical issue(s) involved in the case. (2 marks) (b) Identify SIX primary stakeholders and assess their positions. (14 marks) (c) Identify at least FIVE available alternatives to Amy. (5 marks) (d) Assess the ethicality of accepting Billy's offer based on utilitarian, deontology and virtue ethics theories. (12 marks) (e) Explain the FIVE fundamental principles of the I-IKICPA Code of Ethics and evaluate whether accepting Billy's offer would violate any of the five principles. (15 marks) (f) Advise Amy on the possible legal implications if she accepts Billy's offer
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