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. Cindy is an accountant for Caperton, Inc., and is stressed by the amount of work her boss has been giving her. Yesterday, Cindy’s boss asked that she perform a financial statement analysis on the company’s previous five years of financial statements and write a report explaining any inconsistencies. Cindy is busy, so she quickly throws together the report, without double checking the data used and the related calculations.

b. Deneen is the senior accounting manager for Kent Co. and is in charge of preparing quarterly reports for the CEO and CFO. These reports compare a variety of Kent’s financial ratios to industry averages. This quarter, Kent has done poorly compared to its competitors, so some of its ratios were not favorable. Because of their legendary tempers, Deneen does not want to upset the CEO and CFO. She decides to include only favorable ratios in her report.

c. Malik is the accounting manager for Belmont Global and knows the company must maintain working capital in excess of $50,000 to stay in accordance with its debt covenants. This past year, Belmont’s working capital fell below $50,000 for a short period of time. Malik created fictitious entries to hide the violation of its debt covenants.

d. Matt was recently hired as a senior audit manager at the firm of Marjenin & Vena, but did not disclose that his wife is the CFO for one of its clients.