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. Eleanor has been the CFO of Solaris Technologies for 15 years, and has never uncovered any material mistakes or fraud on its financial statements. Eleanor is sure this year that nothing has changed, so she signs off on the financial statements without reviewing them first because she has more urgent matters demanding her attention.

b. Patty is a newly hired accountant at Trucking Systems. Her responsibilities include preparing all of the company’s financial statements including its statement of cash flows. Trucking Systems uses the direct method to prepare its statement of cash flows. Patty has not prepared a statement of cash flows in many years and cannot remember how to prepare it using the direct method. Patty prepares the statement of cash flows using the indirect method and hopes that no one will notice.

c. Reagan is the accounting manager of Velocity, Inc., and has approved the acquisition of expensive, new equipment without approval from her boss. She knows her boss will find out when looking at the financial statements so Reagan asks one of the staff accountants to hide the cash flow in another category where it will not be noticed.

d. Albert is an accountant who is close to retirement at Image Industries. Since he does not have much time left with the company, he has been a little careless with the preparation of the company’s statement of cash flows. The ending cash balance does not match the cash balance on the balance sheet, but Albert forces it to balance with a plug figure.