Due to the death of its CFO, an audit client had its external auditor, Jon Snow,...
Due to the death of its CFO, an audit client had its external auditor, Jon Snow, CPA, perform the CFO’s job for two months until a replacement was hired.
Knowing the AICPA Code of Professional Conduct, answer the following:
- Indicate which principle or rule would be violated, or if none would be violated.
- State why the rule would be violated.
- Explain if there is a way to avoid breaking the rule by doing something different in these examples.
Homework Answers
Explanation:
1.
The appointment of External auditor, as CFO of the organisation,
till the time replacement is found for the doed CFO violates the
rule 101 of independence of AICPA code of professional conduct.
2.
As per rule 101- independence, the auditor of an organisation
during the period of professional engagement cannot act as an
employee, director or partner, member of management of the company,
associate, holding company or associate of holding company.
Therefore, in the given situation where the Jon snow has been appointed as CPA for the time being they find replacement, the rule of 101 is violated as independence of external auditor is violated by appointing him as CFO, while he is in professional engagement.
3.
To avoid the breaking of rule,
AND the organisation also wants to appoint only CPA their CFO till
tje time they find replacement.
Then they must higher CPA who is not in association, partnership,
or in employment with the auditor of their firm.
Add Answer to:
Due to the death of its CFO, an audit client had its external
auditor, Jon Snow,...
Manny Machado, CPA, signed on to perform an inventory control study for a new client, ABC...
Manny Machado, CPA, signed on to perform an inventory control study for a new client, ABC Company. Once the study is complete, he recommends a new inventory control system. Currently, ABC engages another audit firm to audit its financial statements. The financial arrangement is that ABC will implement the new systems and over the next 5 years, the will pay Machado 50% of the savings in inventory costs. Indicate which principle or rule would be violated, or if none would...
Justin Timberlake, CPA, has served as the auditor for the XYZ Corporation for many years. In...
Justin Timberlake, CPA, has served as the auditor for the XYZ Corporation for many years. In addition, Timberlake has performed other services for the company. This year, the Chief Financial Officer has asked Timberlake to perform a major computer system evaluation. Indicate which principle or rule would be violated, or if none would be violated. State why the rule would be violated. Explain if there is a way to avoid breaking the rule by doing something different in these examples.
Situation No. 3: AICPA Code of Professional Conduct For cach situation, Identify the most applicable AICPA...
Situation No. 3: AICPA Code of Professional Conduct For cach situation, Identify the most applicable AICPA rule of conduct and whether there is a violation or no violation of the rule. A. Independence- - No Violation B. Independence--Violation L. Contingent Fees--No Violation J. Contingent Fees-- Violation C. Integrity and Objectivity. -No Violation K. Acts Discreditable-No Violation D. Integrity and Objectivity. Violation L. Acts Discreditable Violation E. Accounting Principle--No Violation F. Accounting Principle--Violation M. Advertising and Solicitation-No Violation N. Advertising and...
e. An audit of a U.S. not-for-profit organization. f. An audit of a U.S. private company...
e. An audit of a U.S. not-for-profit organization. f. An audit of a U.S. private company to be used for a loan from a publicly traded bank. g. An audit of a U.S. public company. h. An audit of a U.S. public company that is a subsidiary of a Japanese company that will be used for reporting by the parent company in Japan. 2-20 (OBJECTIVE 2-7) Ray, the owner of a small company, asked Holmes, a CPA, to conduct an...
Jon Williams, CPA, is in the middle of a quandary related to his audit and tax...
Jon Williams, CPA, is in the middle of a quandary related to his audit and tax client Oneway Corporation. The three directors of Oneway are the officers and the only three stockholders, each owning exactly one-third of the shares. President Raul Jack founded the company and is now nearing retirement. As an individual, he is also Williams' tax client. Vice President Sandra Smith manages the day-to-day operations. She has been instrumental in increasing the business and its profits. Her individual...
Multiple Choice: (30pts) _______ 1-The profession’s ethical standards would most likely be considered to have been...
Multiple Choice: (30pts) _______ 1-The profession’s ethical standards would most likely be considered to have been violated when a CPA: Continued an audit engagement after the commencement of litigation against the CPA alleging excessive fees filed in a stockholder’s derivative action Represented to a potential client that the CPA’s fees were substantially lower than the fees charged by another CPA’s for comparable services. Issued a report on a financial forecast that omitted a caution regarding achievability. Accepted a consultation...
The limitations of an audit are NOT caused by ________. A. the nature of financial reporting....
The limitations of an audit are NOT caused by ________. A. the nature of financial reporting. B. the nature of audit procedures. C. the need for the audit to be conducted within a reasonable period of time at a reasonable cost. D. a guarantee that the financial statements are free from error 2.5 points QUESTION 4 In an unqualified audit report on the financial statements of a public company, ACC562what does the first statement of the opinion paragraph state? A....
Provided is a list of actions or situations that show a violation of the AICPA Code...
Provided is a list of actions or situations that show a violation of the AICPA Code of Professional Conduct. For each case, select the relevant rule that is being violated. Relevant Rule or Interpretation a. Your client. Contrary Corporation, is very upset over the fact that your audit last year failed to detect an $800,000 inventory overstatement caused by employee theft and falsification of the records. The board discussed the matter and authorized its attorneys to explore the possibility of...
As an auditor, you may have access to the internal information of your clients. Discuss what...
As an auditor, you may have access to the internal information of your clients. Discuss what rule of conduct was violated by Scott London in this case. Big 4 Partner Convicted of Insider Trading for Disclosing Confidential Information Auditors frequently receive access to confidential client information, such as e information before the earnings announcement or information about planned mergere acquisitions. The AICPA Code of Professional Conduct prohibits members in public practice disclosing any confidential information without the consent of the...
1. Do you agree with Deloitte's assertion that Adams had no "substantive role" in the 2008...
1. Do you agree with Deloitte's assertion that Adams had no
"substantive role" in the 2008 and 2009 Caesars audits? Defend your
answer.
2. The SEC applies a principles-based approach to mitigating the
risks that may undercut auditor independence. Identify the four
guiding principles applied by the SEC to protect the independence
of auditors of public companies.
3. Assume Adams had used his personal funds to finance his
gaming activities in the Caesars casino. Under those circumstances,
would he have...
Situation No. 3: AICPA Code of Professional Conduct For cach situation, Identify the most applicable AICPA rule of conduct and whether there is a violation or no violation of the rule. A. Independence- - No Violation B. Independence--Violation L. Contingent Fees--No Violation J. Contingent Fees-- Violation C. Integrity and Objectivity. -No Violation K. Acts Discreditable-No Violation D. Integrity and Objectivity. Violation L. Acts Discreditable Violation E. Accounting Principle--No Violation F. Accounting Principle--Violation M. Advertising and Solicitation-No Violation N. Advertising and...
e. An audit of a U.S. not-for-profit organization. f. An audit of a U.S. private company to be used for a loan from a publicly traded bank. g. An audit of a U.S. public company. h. An audit of a U.S. public company that is a subsidiary of a Japanese company that will be used for reporting by the parent company in Japan. 2-20 (OBJECTIVE 2-7) Ray, the owner of a small company, asked Holmes, a CPA, to conduct an...
Provided is a list of actions or situations that show a violation of the AICPA Code of Professional Conduct. For each case, select the relevant rule that is being violated. Relevant Rule or Interpretation a. Your client. Contrary Corporation, is very upset over the fact that your audit last year failed to detect an $800,000 inventory overstatement caused by employee theft and falsification of the records. The board discussed the matter and authorized its attorneys to explore the possibility of...
As an auditor, you may have access to the internal information of your clients. Discuss what rule of conduct was violated by Scott London in this case. Big 4 Partner Convicted of Insider Trading for Disclosing Confidential Information Auditors frequently receive access to confidential client information, such as e information before the earnings announcement or information about planned mergere acquisitions. The AICPA Code of Professional Conduct prohibits members in public practice disclosing any confidential information without the consent of the...
1. Do you agree with Deloitte's assertion that Adams had no
"substantive role" in the 2008 and 2009 Caesars audits? Defend your
answer.
2. The SEC applies a principles-based approach to mitigating the
risks that may undercut auditor independence. Identify the four
guiding principles applied by the SEC to protect the independence
of auditors of public companies.
3. Assume Adams had used his personal funds to finance his
gaming activities in the Caesars casino. Under those circumstances,
would he have...
Most questions answered within 3 hours.
-
Dividing Partnership Net Loss
Leigh Meadows and Byron Leef formed a partnership in which the
partnership...
asked 1 minute ago -
10. Two forces act on a 3 kg object, the gravitational force and
a second, constant...
asked 5 minutes ago -
Discuss how Entrepreneurial leadership style differs
from traditional leadership?
asked 27 minutes ago -
A futuristic design for a car is to have a large solid
disk-shaped flywheel within the...
asked 25 minutes ago -
Solid NaOH is added to a solution of 0.50 M acetic acid until
the pH of...
asked 29 minutes ago -
Which of the following statements is not a characteristic of the
Internal Revenue Code?
A) The...
asked 36 minutes ago -
Say true or false and explain it.
A heap is represented using an array. The array...
asked 46 minutes ago -
Explain how the DNA replication enzyme complex is organized and
functions, please don't copy paste from...
asked 46 minutes ago -
how
can personality contribute to one scoring high on the need to
evaluate measurement by Jarvis?
asked 47 minutes ago -
A high jumper is attempting to jump over a crossbar that is
placed at a height...
asked 51 minutes ago -
1.
A hemophiliac male mates with a healthy female. what are the
possible genotypes for the...
asked 1 hour ago -
You could argue that even though Rockefeller clearly had
enormous market power (90% of the market)...
asked 1 hour ago