Frank Gilbert and Gloria Aponte formed a corporation called Financial Services, Inc., each taking 50 percent of the authorized common stock. Gilbert is a CPA and a member of the American Institute of CPAs; Aponte is a CPCU (Chartered Property Casualty Underwriter). The corporation performs auditing and tax services under Gilbert's direction and insurance services under Aponte's supervision. The opening of the corporation's office was announced by a three-inch, two-column "card" in the local newspaper.

One of the corporation's first audit clients was the Grandtime Company. Grandtime had total assets of \($600,000\) and total liabilities of \($270,000.\) In the course of his audit, Gilbert found that Grandtime's building with a book value of \($240,000\) was pledged as security for a ten-year note in the amount of \($200,000.\) The client's statements did not mention that the building was pledged as security for the note. However, since the failure to disclose the lien did not affect either the value of the assets or the amount of the liabilities, and since his audit was satisfactory in all other respects, Gilbert issued an unqualified opinion on Grandtime's financial statements. About two months after the date of his opinion, Gilbert learned that an insurance company was planning to loan Grandtime \($150,000\) in the form of a first-mortgage note on the building. Realizing that the insurance company was unaware of the existing lien on the building, Gilbert had Aponte notify the insurance company of the fact that Grandtime's building was pledged as security for the note. Shortly after the events described above, Gilbert was charged with a violation of professional ethics.

Required: Identify and discuss the ethical implications of those acts by Gilbert that were in violation of the AICPA Code of Professional Conduct.