Simon is recently qualified as a professional accountant after completing the practical requirements with Lau, Ho & Co. Certified Public Accountants (Lau). Soon afterwards, Simon applied for and secured a position with a Lau audit client, which is called Chan Cheung Kee Construction and Investment Co. (CCK). CCK is a Hong Kong based company listed on the Stock Exchange of Hong Kong. Simon has never worked on the audit of CCK before. During his first month at his new job, Simon becomes aware of the fact that a Lau's recommendation was partially or entirely responsible for him having been chosen for his job. Lau's advice is often sought by CCK's senior management. CCK requested Lau to provide some audit working papers relating to CCK's systems and operating procedures so that Simon can use these documents to speed up his training on CCK's system and operating procedures. Lau agreed and subsequently asked a junior audit staff to duplicate extracts from last year's audit working papers. One of the working papers extracts, which probably should not have been photocopied, indicates that Lau charges CCK its audit fee based on a formula that is calculated as a varying percentage, depending on how successful CCK is in its public offerings during the year. Simon does not immediately react by asking any potentially embarrassing questions. However, Simon is concerned with the apparent ethical violation. Simon is also uncertain about the ethical responsibilities that he has to both past and present employers, and to the professional bodies. Discussion a. Describe the apparent ethical violation. b. Describe the ethical responsibilities Simon has. c. Discuss the course of action that Simon should take