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For each situation (1-5), identify the most applicable AICPA rule of conduct and whether there is a violation or no violation of the rule (A-F).
For each situation (1-5), identify the most applicable AICPA rule of conduct and whether there is a violation or no violation of the rule (A-F). One or more letters may not be used.
- Independence Rule; no violation
- Independence Rule; violation
- Integrity and Objectivity Rule; no violation
- Integrity and Objectivity Rule; violation
- Accounting Principles Rule; no violation
- Accounting Principles Rule; violation
___ | 1. | Sterling Stevens, CPA, was auditing Global Services Company. Global Services used an accounting principle that was not in conformity with GAAP. Nevertheless, Stevens rendered a standard unqualified audit report. |
___ | 2. | Christina Hall, CPA, provided expert testimony for a plaintiff. The defendant in the case was a client of Hall's. |
___ | 3. | Sam Miller, CPA, owned 100 shares of Johnson Drilling, Inc., his audit client. |
___ | 4. | Dewey Wise, CPA, obtained a loan from an insurance company using the cash value of the insurance policy as collateral. The loan is for less money than the cash value of the policy. |
___ | 5. | Stella Steinbeck, CPA, was auditing Good Services Company. Good Services used an accounting principle that was not in conformity with GAAP. Good Services believed, and Steinbeck concurred, that using a generally accepted method would cause the financial statements to be misleading. Therefore, Steinbeck rendered a standard unqualified audit report. |
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