D/2021-01/... D Question 3 20 pts 1 ents For each of the following four situations, decide whether or not the auditor has violated professional ethics. (See the list of the Rules of Conduct in problem 1). (1) State which rule of conduct is involved; (2) State if there is a violation or not; and (3) Briefly explain why there is or is not a violation. of Page ster 1. Mike Espy is an audit manager with Cornwall, LLP. The audit at his client, Big Time Manufacturing Company, has gone well and he expects the audit partner to sign off on an unqualified audit report soon. While walking by the audit work room at the client, he overhears a conversation between two of his audit staff members. One of them says, "I have some stock in Big Tirhe. About 25 shares. My rich uncle Powell left it to me in an inheritance. How cool is that?" 2. Breanni Crakins, CPA, is very client-focused. She is auditing Bright Fashions, Inc. and has come to believe that the LIFO inventory calculations are incorrect. She even thinks that inventory on the balance sheet is materially misstated. She raises her concern with the client's CFO, who says, very calmly but firmly, "If you raise questions about this, I will recommend that your accounting firm not be hired again." Breanni backs off and, in the workpapers, writes a conclusion that inventory is fairly stated. 3. Georgette Hermanson has just opened her accounting firm. She is specializing in audits of small non-public companies and their tax compliance and planning work. The name of her firm is: No Pain No Problem Audits, LLP. 4. Amy Xiong is an audit partner with Moss and Moss, LLP (MM). MM has three office locations, Denver, Salt Lake City, and Las Vegas. The audit of Speedy Car, Inc. is done by the Denver office. Amy is in the Denver office. Amy supports her two children who attend college and live at home. As part of joining an investment club, the two kids have purchased stock in three companies, General Motors, Ford, and Speedy Car