You are a manager in Dedza & Co, a firm of Chartered Certified Accountants. Recently you have been assigned specific responsibility for undertaking annual reviews of existing clients. The following issues has arisen in connection with three clients

: i. Dedza was appointed auditor to Kora Co Ltd last year and has recently issued an unmodified opinion on the financial statement for the year ended 31 March 2021. To your surprise, the tax authority has just launched an investigation into the affairs of Kora on suspicion of under declaring income. (5 Marks)

ii. Your firm has provided financial advice to the Pholey family for many years, and this has sometimes involved your firm in carrying out transactions on their behalf. The eldest son, Esau is to take up a position as a senior government official to a foreign country next month. . (5 Marks)

iii. The Chief executive of Ardenex Co, an exporter of specialist equipment, has asked you for advice on the accounting treatment and disclosure of payment being made for security consultancy services. The payment which aims to ensure that consignments are not impounded in the destination country of a major customer, may be material to the financial statement for the year ended 31 December 2020. Ardenex does not treat these payments as tax deductible. (5 Marks)

Required: Identified and comment on the ethical and other professional issues raised by each of these matters and state what action, if any Dedza & Co should now take. Note: The mark allocation is shown against each of the situations