Each of these are real-life situations involving possible AICPA Code violations. For each one, state three things: 1. what rule is applied to the situation; 2. whether it is a violation of the Code or not and if so 3. explain the nature of the violation.

13. A nonaudit client requests assistance from Steve Watson, CPA, in the installation of a local area network. Watson has no experience in this type of work and no knowledge of the clients computer system, so he obtains assistance from a computer consultant. The consultant is not in the practice of public accounting, but Watson is confident of his professional skills. Because of the highly technical nature of the work, Watson is not able to review the consultants work.

14. Frank DiSalvo is a CPA, but not a partner, with three years of professional experience with Thomas Jenkins and Company, CPAs. He owns 25 shares of stock in an audit client of the firm, but he does not take part in the audit of the client, and the amount of stock is not material in relation to his total wealth.

15. Seven small Maryland 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.

16. Sarah Adams, CPA, set up a casualty and fire insurance agency to complement his auditing and tax services. She does not use her own name on anything pertaining to the insurance agency and has a highly competent manager, Jack Franks, who runs it. Adams often requests Franks to review the adequacy of a clients insurance with management if it seems underinsured. She believes that she provides a valuable service to client by informing them when they are underinsured.