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- Visit the AICPA’s web site and read Sections ET 50 to 57 of the Code of Professional Conduct and By- laws. Prepare a memo to your professor setting forth the important professional guidelines incorporated in the Code. For each principle you identify, provide an example of how that principle might impact you in your career as a forensic accountant.Independence, Integrity, and Objectivity Cases. Read the following cases.Required:For each case, state whether the action or situation shows a violation of the AICPA Code ofProfessional Conduct, explain why if it does, and cite the relevant rule.a. CPA Ellen Stout performs the audit of the local symphony society. Because of her good work, she was elected an honorary member of the board of directors.b. CPA Darcy Wolfe practices management consulting in the area of computerized information systems under the firm name of Wolfe & Associates. The “associates” are not CPAs, and the firm is not an accounting firm. However, Wolfe shows “CPA” on business cards and uses these credentials when dealing with clients.c. CPA Alex Goodwin performs significant day-to-day bookkeeping services for Harper Corporation and supervises the work of the one part-time bookkeeper employed by Hadley Harper. This year, Harper wants to engage CPA Goodwin to perform an audit.d. CPA H. Poirot bought a home in 1989…Create a hypothetical ethics case then describe the guidance that applies to the issue. The simplest was to complete this assignment is to use any ethical dilemma that you may have encountered in professional practice or review the AICPA Code of Conduct or the IRS Circular 230 then inventing an ethical situation based on one of these sources. Also, you can use news stories, any disciplinary actions on state CPA websites. After you describe the situation in a case format, then search and locate the ethics guidance that addresses the issue. Use this format: 1. What inspired this case idea? 2. Describe the situation in case format 3. Outline the applicable guidance and how it should be applied to this issue
- Discuss whether the chartered accountants/registered auditors identified in each of the situations described below have failed to comply or are in danger of failing to comply with the fundamental ethical principles in the SAICA Code of Professional Conduct (2022). (First state the ethical principles/s and then the explanation for each principle.) Note: Any of the given situations may amount to non-compliance with more than one principle. Q2.1. John Smith is a registered auditor and the engagement partner on the audit of Letsatsi Safaris Ltd, a large company that owns several wildlife game reserves in South Africa and neighbouring countries. One of the perks of being the audit partner of Letsatsi Safaris Ltd, is that the managing director of the client grants a seven night free stay at a five star all inclusive lodge for four people. John is very excited about this prospect. However, in return, the managing director of the client requires an unqualified audit opinionBarbara Wells is a first-year auditor for a large public accounting firm. She was assigned to audit Larson Brothers; the CEO of Larson is her brother. She discussed some of her findings with family members. What is the relevant requirement (s) for the ethical behavior of an auditor? a. Qualified to carry out the scope of service b. Confidential c. All of those listed d. IndependenceWe discuss the study by Libby and Thorne of the association between auditors’ virtue and professional judgment, done by asking members of the Canadian Institute of Chartered Accountants to rate the importance of a variety of virtues. The most important virtues identified were truthful, independent, objective, and having integrity. The authors note that the inclusion of these virtues in professional codes of conduct (such as the Principles of the AICPA Code of Professional Conduct) may account for their perceived importance. Explain how these virtues relate to an auditor’s intention to make ethical decisions.
- John Josephs an audit manager for Tip, Acanoe & Tylerto, was asked to speak at a dinner meeting of the local Small Business Administration Association. The president of the association has suggested that he talk about the various phases of the audit process. John has asked you, his trusted assistant, to prepare an outline for his speech. He suggests that you answer the following. Required: A) List and describe the various phases of an audit. B) Describe how audit procedures designed for one purpose might provide evidence for other purposes. Give an example. C) One of the phases involves understanding an entity's internal control. Why might the members of the association be particulary interested in the work conducted by auditors in this phase of the audit?Mrs. Hubbard, a mother of two, has been selected for an audit. Advise her on what to do to prepare for the audit and what to do if the audit does not turn out favorably. Question content area bottom Part 1 To prepare for the audit: (Select all that apply.) A. Mrs. Hubbard should hire an accountant or tax attorney, if necessary. B. Mrs. Hubbard should anticipate probable questions and develop responses. C. Mrs. Hubbard should gather all supporting documents. D. Mrs. Hubbard should reexamine the areas where the IRS raised questions.The fundamental ethical principles that all chartered accountants and registered auditors shouldcomply with are laid down by the SAICA and IRBA code of professional conduct. You are requiredto identify and provide a brief explanation for each of the fundamental ethical principles.
- Read the following cases. Required: For each case, select whether the action or situation shows a violation of the AICPA Code of Professional Conduct, and select the relevant rule. a. CPA Jerry Cheese became the new auditor for Python Insurance Company. Cheese knew a great deal about insurance accounting but had never conducted an audit of an insurance company. Consequently, Cheese hired CPA Tate Gilliam, who had six years of experience with the State Department of Insurance Audit. Gilliam managed the audit, and Cheese was the partner in charge. b. CPA Mackenzie Palin practices public accounting and is a director of Comedy Company. Palin's firm performs consulting and tax services for Comedy. Palin prepared unaudited financial statements on Comedy's letterhead and submitted them to First National Bank in support of a loan application. Palin's accounting firm received a fee for this service. c. CPA Ellery Idle audited the financial statements of Monty Corporation and gave an unmodified…Audit and assurance standards recognize the vital importance of performing audit and assurance activities with proficiency, due professional care and objectivity. Cynthia Cooper, WorldCom whistleblower and internationally recognized expert on ethics and leadership in an interview (https://www.cfo.com/human-capital-careers/2008/02/worldcom-whistle-blower-cynthia-cooper/) on ethics stated, "I think we have to do our best not to forget what we've been through and hold tight to the positive changes in corporate governance that so many people have worked to achieve. Question A: If Management is pressuring an internal auditor to look the other way, explain how the internal audit and assurance professional standards can help in this situation. Question B: In the article, she states, "My feelings changed from curiousity to discomfort to suspicion based on some of the accounting entries my team and I had identified, and also on the odd reactions I was getting from some of the fiannce…You are an induction and training officer for Maher Public Accountants, a leading accounting firm based in Dublin, Ireland. You are due to give a training course to a group of newly recruited audit trainees in fraud and error. This is a particularly important course and audit trainees from previous cohorts have acknowledged the benefit of the course in their feedback. The current cohort of audit trainees are particularly interested in understanding their responsibilities and those of the directors in the area of fraud and error. Required:Prepare material for the audit trainees as part of the induction pack which covers the following:(a) Identify and distinguish the responsibilities of the auditor and the directors with regards to fraud. (b) Discuss the steps undertaken by auditors when they detect and suspect fraud. (c) Critically examine the limitations of audit procedures in detecting fraud and error.