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XYZ Berhad has tendered for the external audit of ABC Berhad. XYZ Berhad has proposed a fee below the market rate in the hope that

XYZ Berhad has tendered for the external audit of ABC Berhad. XYZ Berhad has proposed a fee below the market rate in the hope that the firm will subsequently be awarded more lucrative advisory work.

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Identify and explain the ethical issues posed by ABC & Co's proposal.

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