You are an audit manager in Lim Koh Pee & Associates, a mid-sized audit firm providing

audit and other assurance services to local companies. One of your clients, SmartTrain

Pte Ltd, asked you to arrange a meeting with Mr Lim, a senior partner of the audit firm, to

discuss a potential business opportunity. SmartTrain Pte Ltd is a private education

institution, and is planning to organise a series of continuing professional development

programmes for chartered accountants in Singapore, at which trainers will discuss

technical updates to financial reporting, tax and auditing standards. SmartTrain Pte Ltd

proposed that your firm could invest some cash in the business opportunity, supply the

trainers, market the programmes to your audit clients, and that any profit made would be

shared between the firm and SmartTrain Pte Ltd.

3

Required:

Identify and explain any ethical and other professional implications in respect of this

business arrangement with SmartTrain Pte Ltd.