Question

For each situation (1-5), select the most applicable AICPA rule of conduct and F). One or more letters may not be used. ether there is a violation or no violation of the rule (A- A. Independence Rule: no violation B. Independence Rule, violation C. Confidential Client Information Rule; no violation D. Confidential Client Information Rule: violation E. Fees and Other Types of Remuneration Rule, no violation F. Fees and Other Types of Remuneration Rule: violation Jackson, CPA, and one of his audit clients are considering investing in a business together. Jackson would own 25% of the business and the client would own 50%. Jackson's investment in the business is material to his not worth Feller, CPA, is the corporate controller for Robert Corporation Foller believes his employer may have committed an illegal act After discussing the matter with his attorney, Feter decides to disclose the matter to the appropriate authorities Brock, CPA, is an owner in the firm Louis and Brock, CPAS Brock's husband is on the board of directors of Midland Corporation and client of Louis and Brock Brock does not participate on the audit engagement Ruth CPA owns a building and leases a portion of the space to an audit client. The income from the lease is not material to Truth Maris, CPA performs investment advisory services for an audit client and receives an annual foc based on a percentage of the value of the client's investment portfolio at the end of each year

Answer 1

1	Jackson, CPA, and one of his audit clients are considering investing in a business together. Jackson would own 25% of the business and the client would own 50%. Jackson's investment in the business is material to his net worth.	A	Independence Rule, violation	A covered member is not supposed to have any financial with the client
2	Feller, CPA, is the corporate controller for Robert Corporation. Feller believes his employer may have committed an illegal act. After discussing the matter with his attorney, Feller decides to disclose the matter to the appropriate authorities.	C	confidential client information; no violation	The disclosure of client information here will not be considered a violation.
3	Brock, CPA, is an owner in the firm Louis and Brock, CPAs. Brock's husband is on the board of directors of Midland Corporation, an audit client of Louis and Brock. Brock does not participate on the audit engagement.	A	Independence Rule, violation	A covered member is not supposed to have any financial with the client
4	Ruth, CPA, owns a building and leases a portion of the space to an audit client. The income from the lease is not material to Ruth.	A	Independence Rule, violation	A covered member is not supposed to have any financial with the client
5	Maris, CPA, performs investment advisory services for an audit client and receives an annual fee based on a percentage of the value of the client's investment portfolio at the end of each year.	F	Fees and other types of remuneration rule; violation	According to rule 302, it is a violation and this contingent fees is against the rule.