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. Susan, a CPA, works in the accounting department of Majestic Industries. She noticed that the company’s debt ratio is a little higher than its bank agreement allows. In an attempt to decrease the debt ratio, she decides to record revenue from services that will be performed the first week of the next period. She reasons that the revenue is going to be recognized anyway; her entry simply accelerates it.

b. Zachary, a CPA, accepted a position in the accounting department of Fairless State Bank. Zachary is in charge of making the bank’s bond amortization adjusting entries each month. He does not remember how to make these entries because he has not used the effective-interest method since his junior year in college. Zachary assumes the amortization entry for this month is the same amount as last month and uses that total rather than calculating the current amortization amount.

c. Thompson Pools is a small, family-owned company that employs one accountant, Andrew Poling, CPA. Andrew performs all of the accounting functions at Thompson Pools. He writes checks payable to the bank for loan payments. Some of the checks are duplicate loan payments; Andrew cashes these checks at the bank and pockets the cash.

d. Isabelle is an auditor for Roeder & McFarland, a CPA firm. Her mother owns Hartville Plumbing Supply. Isabelle is excited to be assigned to work on the Hartville account because she understands the business well from working part-time for Hartville during college summer breaks. Isabelle does not disclose that her mother owns Hartville because she knows she will be impartial.