Question

Charles is at a neighbourhood Christmas party with several ofhis flatmates. Over a few
beers, Charles gets into a conversation with a neighbour, William,about mutual
acquaintances. Charles is a senior auditor with a large accountingfirm (although he
tells William that he is a partner at the firm) and William worksfor a large bank. During
the conversation Charles and William discover that they have bothhad professional
dealings with a particular family-owned manufacturing company.William reveals that
the company’s line of credit is about to be cancelled because ofsome irregularities with
the security. Charles is concerned to hear this news because he hasjust participated in
the company’s financial report audit and there was no indication ofany problems with
its borrowings. However, as Charles explains to William, he has hisdoubts about the
patriarch of the family, whom Charles believes is having an affairwith his personal
assistant. Charles also tells William that the family has quietlyincreased its
shareholdings in a listed company that supplies components to thefamily
manufacturing company. The components manufacturing company isabout to
announce to the share market that it has just won a very large, andvery profitable,
contract with a Chinese company.

Discuss the ethical principles that are potentially breached byCharles’s
behaviour at the party and explain how the principles arebreached.