Each of the following situations involves a possible violation of the AICPA Code of Professional Conduct. For each situation, state the applicable rule of conduct and whether it is a violation, VURGUI Situation Rule(s) of Conduct of Code? a. Stefan, CPA, provides tax services, management advisory services, and bookkeeping services and also conducts audits for the same nonpublic client. Because the firm is small, the same person often provides all the services. Y No b. Roberta Marteens is a CPA, but not a partner, with three years of Commissions and Referral Fees professional experience with Johnson and Batchelor, CPAs. She Compliance with Standards owns 25 shares of stock in an audit client of the firm, but she does not take part in the audit of the client, and the amount of stock is Confidential Client Information not material in relation to her total wealth Contingent Fees Independence and Integrity and Objectivity Yes c. A nonaudit client requests assistance of Taylor Bordeaux, CPA, in the installation of a local area network. Bordeaux has no experience in this type of work and no knowledge of the client's computer system, so she obtains assistance from a computer consultant. The consultant is not in the practice of public accounting, but Bordeaux is confident of her professional skills. Because of the highly technical nature of the work, Bordeaux is not able to review the consultant's work. d. In preparing the personal tax returns for a client, Sarah Milsaps, CPA, observed that the deductions for contributions and interest were unusually large. When she asked the client for backup Confidential Client Information No Yes Choose from any drop-down list and then click Check Answer. d. In preparing the personal tax returns for a client, Sarah Milsaps, CPA, observed that the deductions for contributions and interest were unusually large. When she asked the client for backup information to support the deductions, she was told, "Ask me no questions, and I will tell you no lies." Milsaps completed the return on the basis of the information acquired from the client. Independence No Independence the f ch situ vices, nonpul , sot use the client. e. Silvia Panster, CPA, set up a casualty and fire insurance agency to complement her auditing and tax services. She does not use her own name on anything pertaining to the insurance agency and has a highly competent manager, Meg Emrich, who runs it. Panster often requests Emrich to review the adequacy of a client's insurance with management if it seems underinsured. She believes that she provides a valuable service to clients by informing them when they are underinsured. or f. Seven small Austin, Texas, CPA firms have become involved in an information project by taking part in an interfirm working paper review program. Under the program, each firm designates two partners to review the audit files, including the tax returns and the financial statements, of another CPA firm taking part in the program. At the end of each review, the auditors who prepared the working papers and the reviewers have a conference to discuss the strengths and weaknesses of the audit. They do not obtain authorization from the audit client before the review takes place nec g. Francisco Hernandez, CPA, serves as controller of a U.S.-based situ company that has a significant portion of its operations in several ces, South American countries. Certain government provisions in mpul selected countries require the company to file financial statements CPA based on international standards. Francisco oversees the issuance use of the company's financial statements and asserts that the Jag statements are based on international financial accounting nagd standards; however, the standards he uses are not those issued by the International Accounting Standards Board. ath
