The client of a CPA is a partnership. The drawings of the managing partner are considerably in
Question:
The client of a CPA is a partnership. The drawings of the managing partner are considerably in excess of the partner's pro rata share of earnings. Other partners are not aware of the excess drawings because financial statements and tax returns are submitted to them without details of individual partners' balances or withdrawals. No salaries are paid to the partners.
1. Discuss the specific action to be taken by the CPA.
2. In this situation what obligation does the CPA have to the other partners? Discuss briefly.
3. In this situation what obligation does the CPA have to outsiders? Discuss briefly.
4. What agreements might be found in the contract between the partners that make action by the CPA unnecessary?
Step by Step Answer:
Auditing Concepts And Methods A Guide To Current Auditing Theory And Practice
ISBN: 9780070099999
5th Edition
Authors: Mcgraw-Hill