Ch 11. Ex 10 (Anticipated Adverse Client Interests)

A CPA firm has been retained by a major corporation to analyze whether its bank overcharged it interest on a bank loan, in violation of Oregon usury laws that establish maximum interest rates. This same CPA firm has been retained by an Arkansas bank that has been accused by Arkansas state regulators of charging excessive interest on consumer loans. Does the CPA firm definitely have a conflict of interest?

Ch 11. Ex 29 (Comprehensive Problems)

Huang started a small CPA firm several decades ago when he immigrated to the United States. Now, he is the managing partner of the firm, which has grown to have 40 partners and over 90 professional staff members. One of Huang's clients is Taiwan Western Bank, located in northern California. Many of Huang's small business clients maintain their checking accounts there. Also, Huang has always had a good working relationship with executives at that bank. Many of the bank's loan officers find Huang to be trustworthy, and some even call him charming. Because of his personal goodwill, Huang can often get his clients' loan applications approved faster there than at other banks.

Huang has been asked to serve on the bank's Board of Directors. He has been assured that the Board meets only one night each month and that this position will not interfere with his duties as managing partner of his CPA firm. Huang has asked you to weigh the pros and cons for him of accepting the director position at the bank. What are your thoughts?