Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Question
Chapter 3, Problem 39OQ
a.
To determine
Explain whether Mr. J would violate the AICPA Code of Professional Conduct by engaging in the suggested practice.
b.
To determine
Explain whether Mr. J would violate the AICPA Code of Professional Conduct by engaging in the suggested practice.
c.
To determine
Explain whether Mr. J would violate the AICPA Code of Professional Conduct by engaging in the suggested practice.
d.
To determine
Explain whether Mr. J would violate the AICPA Code of Professional Conduct by engaging in the suggested practice.
e.
To determine
Explain whether Mr. J would violate the AICPA Code of Professional Conduct by engaging in the suggested practice.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The following situations involve a possible violation of the AICPA’s Code of Professional Conduct. For each situation, (1) determine the applicable rule number from the Code, (2) decide whether or not the Code has been violated, and (3) briefly explain how the situation violates (or does not violate) the Code.
Howard Cunningham & Co., designates its firm as “Members of the American Institute of Certified Public Accountants.” All of the partners of the firm are CPAs. However, one of the partners has recently chosen to allow her membership to lapse because of personal reasons
Rule#_________________ Violation? Yes No
Explanation:
Brad Heist, CPA, was travelling from Dallas to Huston, Texas, when he was pulled over by a police officer on suspicion of driving under the influence. The breath-alyzer and a subsequent blood test revealed that Brad was definitely impaired. He was convicted in court of driving while under the influence of alcohol (DUI). This…
If a CPA and non-CPA form a partnership to practice public accounting, which of the following arrangements would be permitted or
required by the AICPA for such a partnership?
I. A non-CPA banker who will be an owner will not be actively engaged in the practice. The banker is providing the financing to get the
partnership formed and operating.
II. Non-CPA owners (other than the banker) who are actively engaged as members of the firm would have to complete the same
number of work-related CPE requirements as the CPA members.
III. Non-CPA owners could have the title "partner."
IV. None of these partnerships are permitted or required by the AICPA.
‣ I only
II and III
O III only
→ IV only
Your firm is proposing on an engagement to help Company X (a tax client) consider whether to acquire Company Y, your former audit client. You have determined that a conflict of interest exists and that safeguards can be applied to reduce threats to an acceptable level. You are planning to discuss the matter with Company Y tomorrow. What action does the AICPA code require in this situation?
Chapter 3 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 3 - What is meant by the term ethical dilemma?...Ch. 3 - What are the two major types of constraints on...Ch. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Bill Scott works as a manager in the Phoenix...Ch. 3 - Prob. 9RQCh. 3 - Prob. 10RQ
Ch. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Prob. 14RQCh. 3 - Prob. 15RQCh. 3 - Prob. 16RQCh. 3 - Prob. 17RQCh. 3 - Prob. 18RQCh. 3 - Prob. 19RQCh. 3 - Prob. 20RQCh. 3 - Prob. 21RQCh. 3 - Prob. 22RQCh. 3 - Prob. 23RQCh. 3 - Prob. 24RQCh. 3 - Prob. 25RQCh. 3 - Prob. 26RQCh. 3 - Prob. 27QRACh. 3 - Prob. 28QRACh. 3 - Prob. 29QRACh. 3 - Prob. 30QRACh. 3 - Prob. 31QRACh. 3 - Prob. 32QRACh. 3 - Ron Barber, CPA, is auditing the financial...Ch. 3 - Prob. 34AOQCh. 3 - Prob. 34BOQCh. 3 - Prob. 34COQCh. 3 - Prob. 34DOQCh. 3 - Prob. 34EOQCh. 3 - Prob. 34FOQCh. 3 - Prob. 34GOQCh. 3 - Prob. 34HOQCh. 3 - Prob. 34IOQCh. 3 - Prob. 34JOQCh. 3 - Prob. 34KOQCh. 3 - Prob. 34LOQCh. 3 - Prob. 35OQCh. 3 - Prob. 36OQCh. 3 - Prob. 37OQCh. 3 - Prob. 38OQCh. 3 - Prob. 39OQCh. 3 - Prob. 40OQCh. 3 - Prob. 41OQCh. 3 - Prob. 42OQCh. 3 - Gary Watson, a graduating business student at a...Ch. 3 - Prob. 44PCh. 3 - Prob. 45PCh. 3 - Prob. 46PCh. 3 - Prob. 47PCh. 3 - Prob. 48PCh. 3 - Prob. 49ITCCh. 3 - Prob. 50ITCCh. 3 - Prob. 51RDC
Knowledge Booster
Similar questions
- List four circumstances where a CPA licensee from another state would require approval from the California board of Accountancy before practicing public accounting in California. In cases where prior approval is not necessary, what are the requirements for the out of state licensee to practice public accounting. Express your opinions on these requirements. Under what circumstances is a CPA required to notify a client that a CPA is licensed by the California Board of Accountancy? What are the permissible means of making this notification? Why do you think this is a requirement? Under what circumstances can a CPA be paid on a commission basis? Why do you think the regulation impose these restrictions? Which section of the regulations require a CPA to comply with Generally Accepted Accounting Principles and Generally Accepted Auditing Standards? If compliance is required by other organizations (PCAOB, AICPA, etc.) why do you think this requirement is also included in the regulations? If…arrow_forwardCreate 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 issuearrow_forwardWrite an e-mail to a client describing situations in which the partnership entity form might be more advantageous (or disadvantageous) than operating as a C corporation. Use subheadings and bullet points to highlight your major thoughts. You may use the following as a template: Dear Mr./Miss Jones, I am in receipt of your question(s) about the advantages or disadvantages of operating an entity (for tax purposes) either as a partnership or a C-Corporation. I will bullet my points below for clarity. Then you may end the email in any professional way you feel appropriate.arrow_forward
- Following the American Institute of Certified Public Accountants (AICPA) code of professional conduct A is required only by members of the AICPA.B is voluntary by members and nonmembers.C is required only in situations that do not jeopardize personal interest.D mandatory for all CPAs.arrow_forwardYou are an Audit Manager for a CPA firm that is assigned to audit the ABC company. Near the middle of the audit, you are offered a job with the company you are auditing. As the Chief Financial Officer. What are the implications of this offer assuming ABC is a nonpublic corporation? What are the implications of this offer if ABC is a public company?arrow_forwardYour spouse has just accepted a new job as an Accountant at an SEC restricted audit client. Which factors must you consider in order to determine whether this impacts your independence?arrow_forward
- For each of the following situations, indicate whether a CPA who is a partner in the one office CPA firm is "Independent" with respect to the client, by choosing "yes" or "no." Individual CPA's situation The CPA's nondependent child owns an immaterial direct financial interest in the client. b. The CPA's spouse owns an immaterial direct financial interest in the client. c. The CPA's brother is the controller of the client. d. The CPA's father is a salesman for the client. e. The CPA's nondependent mother owns an immaterial direct financial interest in the client. f. The CPA's five year old son who lives with her, was given a gift by a friend of 20 shares of stock worth, in total $100, in an audit client of the CPA. The CPA owns an immaterial amount of stock in a firm audit client, she does not work on that audit engagement. h. The CPA owns an immaterial amount of stock in a firm audit client, she works on that audit engagement. 9- i. A CPA's father owns a material investment in a firm…arrow_forwardAICPA Code of Professional Conduct. Reread the Module B introduction about ScottLondon, CPA.Required:a. What code violations have occurred in this case?b. What is the range of penalties that the PCAOB could levy against London? By the California State Board of Accountancy?c. What do you think is the appropriate penalty?arrow_forwardAttorney Letters. Faye Jaworski, CPA, is auditing the financial statements of FulbrightCompany. As she is nearing the audit completion date, Jaworski realizes that she needs toevaluate whether all material contingencies are properly accounted for and disclosed inFulbright’s financial statements. Because of its size, Fulbright has retained external counsel (Vinson, LLP) to handle its various legal matters.Required:a. List some common procedures that Jaworski will perform with respect to Fulbright’slitigation, claims, and assessments.b. What are the responsibilities of Jaworski, Fulbright, and Vinson with respect to litigation, claims, and assessments?c. Attorney letters are used to provide corroboration of litigation, claims, and assessmentsagainst the client. Briefly describe the process through which attorney letters are prepared, sent, and used in the audit examination.d. What information is normally included in an attorney letter?arrow_forward
- 4. The Certified Public Accountant (CPA) exam is a uniform exam that is administered by a national organization. Licenses, however, are issued by individual states. Explain why you think each state is responsible for issuing CPA licenses. Choose two to three states, and compare and contrast the requirements to become a CPA. Are they fairly consistent or drastically different from each other? A helpful resource is https://www.thiswaytocpa.com/. You may also find it helpful to search the board of accountancy for each state. Tax preparation is a large part of what many CPAs do. Students may be interested to know that a CPA (or any other licensing) is not required to prepare tax returns. Assume you know two friends who prepare tax returns for others, one is a CPA and one is not. Assume that both friends intend to move next year and will, therefore, prepare taxes in another state. Analyze this situation.arrow_forwardSmith and Johns, a CPA firm, was approached by Pioneer Company to conduct an audit for its financial statements for the year 2020. Smith and Johns asked Pioneer Company to grant it an approval to contact the predecessor auditor before giving its acceptance on the new engagement. Smith and Johns would most probably inquire the predecessor auditor about the following issue(s): * O Audit fees O Partner's salary Reasons for change of auditors O All of the above None of the abovearrow_forwardThe Certified Public Accountant (CPA) exam is a uniform exam that is administered by a national organization. Licenses, however, are issued by individual states. A. Explain why you think each state is responsible for issuing CPA licenses. B. Choose two to three states, and compare and contrast the requirements to become a CPA. Are they fairly consistent or drastically different from each other? A helpful resource is https://www.thiswaytocpa.com/. You may also find it helpful to search the board of accountancy for each state. C. Tax preparation is a large part of what many CPAs do. Students may be interested to know that a CPA (or any other licensing) is not required to prepare tax returns. Assume you know two friends who prepare tax returns for others, one is a CPA and one is not. Assume that both friends intend to move next year and will, therefore, prepare taxes in another state. Analyze this situation.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College- Business Its Legal Ethical & Global EnvironmentAccountingISBN:9781305224414Author:JENNINGSPublisher:Cengage
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Business Its Legal Ethical & Global Environment
Accounting
ISBN:9781305224414
Author:JENNINGS
Publisher:Cengage
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub