Violations of Code of Ethics. For each of the following situations involving relations between auditors and the companies they audit indicate whether it violates the IFAC’s Guideline on Ethics for Professional Accountants and the rationale for the applicable guideline.

1 Jame Alosta, Contador Publico Nacional (CPN), owns a large interest in an apartment building in Cruz del Eje, Argentina. Sandor Muller is a 100 per cent owner in Muller Maritime. Muller also owns a substantial interest in the same apartment building as Alosta. Alosta is the auditor for Muller Maritime.

2 Elita Belfour, Chartered Accountant (CA), is an audit senior with Dickson & Co., CA in Barbados. She owns ten shares of stock in a client of Dickson & Co. However, she does not take part in the audit of this client nor is the amount of stock material to her total wealth.

3 Yaping Lei, CPA, discloses confidential information in a peer review of the firm's quality control procedures.

4 Frank Smith, CPA, quotes an audit fee to a potential client on the basis of a standard hourly rate.

Sadegh Kashani, CA, has an automobile loan from Rawalpindi Bank. Kashani does the audit for Rawalpindi Bank.

6 Orvil Searing, Diplomierter Bucherexperte, has resigned his position as vice-president of finance of Poule, SA, effective 1 January. He plans to accept the audit engagement for Poule, SA for the year ending 31 July.