For the following situations indicate whether a rule of the AICPA Code of Conduct applies; if yes, state which rule, whether the rule has been violated, and why or why not.

(a)Walker, CPA, is purchasing a home and received a large mortgage, under normal lending procedures, with a bank that became an audit client after the mortgage was set up; the mortgage amount is material to him.

(b)Logan, CPA, accepted as an audit client a modeling agency that signs up and places models primarily using Internet interactions. Logan has never audited a modeling agency before.

(c)Letchworth and Miller, a local CPA firm, advertised that its audits will always save clients money because the increased efficiencies resulting from audit recommendations will be more than the audit fee.

(d)The firm of Masser & Masser disclosed confidential client information during the course of its inspection by the PCAOB.

(e)Jiggs, CPA, always sets audit fees that are contingent on the number of hours it takes to perform the audit.

(f)Srygley, CPA, pays an attorney, Bill Suttle, a finders fee if Suttle refers a company to him that becomes an audit client.

(g)Cutter and Gaspar, CPA, are having some cash shortages because they recently remodeled their offices. Consequently, they issued an unqualified financial statement audit opinion as a result of an integrated audit, even though they concluded that some of the accounting treatments were not GAAP. They were concerned that if they issued anything other than an unqualified opinion they would lose the client.

(h)A local CPA firm is named Best Buy Audits.