A CPA is the sole owner of a luxury automobile dealership, Excalibur Cars Ltd., which specializes in the retail sale of luxurious automobiles. She is also a partner in a CPA firm that, among other things, compiles the financial statements for the dealership and prepares the company's tax returns. Because the automobile business is based on reputation and trust, she has a prominent sign in the auto dealership and on the dealership's business correspondence (that is, letterhead) explaining that she is also a CPA and a partner in a CPA firm.

Crown, CPA, is the controller of a furniture company operating in Manitoba, Canada. As part of his duties, Crown prepares the company's tax returns. While preparing these returns for the current year, Crown is told by the company's president to reduce the amount of inventories by $1,000,000, so as to reduce taxable income and conserve the company's cash. Crown complies with the president's request since he believes that the amount involved is not material, as taxable income after the reduction in inventories will still be about $12,000,000.

For each situation, can you please indicate whether the CPA-Canada Code of Ethical Principles and Rules of Conduct has been violated or not violated. Explain your reasoning.