Question
For each of the situations? listed, identify which of three principles? (integrity, objectivity and? independence, or due? care) from the AICPA Code of Professional Conduct
For each of the situations? listed, identify which of three principles? (integrity, objectivity and? independence, or due? care) from the AICPA Code of Professional Conduct that is violated. Assume all persons listed in the situations are members of the AICPA.? (Note: Refer to the AICPA Code of Professional? Conduct.
a. | ?Mariah's company is switching to? FIFO, after using the LIFO method for several years. Mariah does not remember how to apply the FIFO? method, but is too busy to review the technique. She figures the auditors will catch anything she does wrong. |
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b. | Xun is the chief accountant for a furniture manufacturer. Two years? ago, Xun changed the? company's inventory method to FIFO. This? year, Xun is changing back to LIFO. The motivation for the changes is solely to manipulate net income. |
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c. | Eboni is an auditor at a public accounting firm. She is auditing one of her? firm's largest clients. Her aunt is the CEO of this client. Eboni does not mention the relationship to her manager. |
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d. | A fire at? Sean's company has destroyed most of the accounting records and a significant amount of inventory. He finds some partial records to be able to reconstruct most of the financial records using the gross profit method. He has the opportunity to substitute a higher number for the quantity on hand so that insurance will pay the company more than the actual loss. He knows that the quantity on hand was much lower than he reports on the insurance claim? form, but rationalizes that his company has paid insurance premiums for many years. |
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