Yan is a recent graduate working in the tax department of a mid-sized chartered accountancy

firm where most of the staff are members of CA-ANZ. Yan recently started work on a task

which forms part of the tax compliance services provided for an important client. Yan

discovers from the client file that the client is also an audit client of the firm.

Yan began to complete the company tax return and found several potential issues. The

company makes many sales online over the internet. There seems to be a disproportionately

high number of transactions going through in different jurisdictions in the early hours of the

morning. Furthermore, Yan can see various journal entries that have narratives indicating that

the place of supply is somewhere she knows to be within an offshore tax haven. Also, the

sundry expenses account seems to have some very small items with the narrative of 'petty

cash'.

Yan is not sure whether further information is required and whether these items are too small

to bother her manager with. However, after some deliberation, Yan emails her manager, who

subsequently telephones her in response, suggesting Yan, her manager, and the client, have a

face-to-face meeting. Yan looked forward to the meeting as she thinks it will be a really good

experience for her. However, once there, she finds the client to be very demanding, and it turns

out they want assistance from the firm in discussions they have commenced with the tax

authority (Inland Revenue) over an ongoing dispute. Yan's manager instructs her to work with

the client. This leaves Yan somewhat concerned and feeling unsure of what to do.

REQUIRED:

Yan approaches you as a confidential ethical counsellor of CA-ANZ. Drawing upon the

AAA Model, you should provide advice to Yan as to her options, recommending a defensible

course of action for her to take.