Part I: During \(19 \times 0\) your client, Nuesel Corporation, requested that your conduct a feasibility study to advise management of the best way the corporation can utilize electronic data processing equipment and which computer, if any, best meets the corporation's requirements. You are technically competent in this area and accept the engagement. On completion of your study the corporation accepts your suggestions and installs the computer and related equipment that you recommended.

Required:

a. Discuss the effect the acceptance of this management services engagement would have upon your independence in expressing an opinion on the financial statements of the Nuesel Corporation.

b. Instead of accepting the engagement, assume that you recommended Ike Mackey, of the CPA firm of Brown and Mackey, who is qualified in specialized services. Upon completion of the engagement your client requests that Mackey's partner, John Brown, perform services in other areas. Should Brown accept the engagemertt? Discuss.

c. A local printer of data processing forms customarily offers a commission for recommending him as supplier. The client is aware of the commission offer and suggests that Mackey accept it. Would it be proper for Mackey to accept the commission with the client's approval? Discuss.

Part 11: Alex Pratt, a retired partner of your CPA firm, has just been appointed to the board of directors of Palmer Corporation, your firm's client. Pratt is also a member of your firm's income tax committee which meets monthly to discuss income tax problems of the partnership's clients. The partnership pays Pratt \(\$ 100\) for each committee meeting he attends and a monthly retirement benefit of \(\$ 1,000\).

Required:

Discuss the effect of Pratt's appointment to the board of directors of Palmer Corporation on your partnership's independence in expressing an opinion on the Palmer Corporation's financial statements.