For each of the situations listed, identify which of three principles (integrity, objectivity and independence, or due care) from the AICPA Code of Professional Conduct is violated. Assume all persons listed in the situations are members of the AICPA. (Note: Refer to the AICPA Code of Professional Conduct contained on pages 25–27 in Chapter 1 for descriptions of the principles.)

a. Lance recently graduated with an accounting degree and found a job in the payables department of Sawyer Sneaker Company. Lance is in charge of adjusting entries for accrued liabilities that have been paid, but he does not remember how to treat these entries because he has not seen them since one of his courses from his junior year in college. Lance assumes the accrued liabilities for this month are the same amounts as last month so he does not enter in the new accrual entries for this month and does not reverse last month’s entries.

b. Frankie Candle Co. is a small, family-owned company that only employs one accountant, Jenny. Since Jenny is in charge of all areas of accounting and knows she will not get caught, she decides to create fictitious accounts payable entries at Frankie Candle Co. for the company she owns, Candle Supply Inc.

c. April is a newly hired auditor for Penny & Blake, a CPA firm. Her father owns E&E Veterinary Supply. April is excited to be assigned to work on the account of E&E since she understands the business well from working part-time during summers there when she was growing up. April does not disclose that her father owns E&E because she knows she will not have any bias.

d. Anne works in the payables department of Yellow Steel, Inc. She noticed that her company’s current ratio is a little lower than the industry average. In an attempt to improve the current ratio, she decides not to accrue wages payable for this month.