Question

.lh which one of the following situations would a CPA be in violatien of the AlCPA Code of Professional Conduct in determining the audit foo? O 1. A fee based on whether the CPA's report on the O 2. A lee based on the outcome of a bankruptcy proceeding O3. A foo based on the nature of the service rendered and the CPA's expertise instead of the actual timo spent on the engagement O 4. A tee based on the fee charged by the prior auditor

Answer 1

Viiolation of AICPA Code of professional conduct is when a fee based on whether CPA report on the client financial statement results in approval of bank loan.

It is because CPAs must be independent in both fact and appearance when providing auditing and other attestation services. This is achieved by applying the principles of integrity, responsibilities, and serving the public interest. But beyond this, accounting firms ensure the objectivity and independence of CPAs within their firms by requiring employees to review client lists for potential conflicts of interest and sign independence agreements, establishing quality control policies and procedures to deal with potential conflicts of interest and independence issues, and through a continual assessment of client relationships and public responsibility.