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If the answer no need an explanation if the answer yes We have to choose from the options Each of the situations involves possible violations

If the answer no need an explanation

if the answer yes We have to choose from the options

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Each of the situations involves possible violations of the AICPA Code of Professional Conduct. For each situation, state whether it is a violation of the Code. In those cases in which it is a violation, explain the nature of the violation and the rationale for the existing rule. Complete the table below to identify whether or not there was a code violation for each situation, and if so, what rule(s) was(were) violated, and an explanation of the violation. Use the list of possible explanations of violations given below for your "Explanation of violation" responses. Begin by completing the table for situations a through d, and then complete the table for situations e through h. (If no violation occurred, select "No" in the "Violation of Code?" column and leave all other columns blank.) (Click the icon to view the possible explanations of violations.) Violation Explanation Situation of Code? If Yes - Rule(s) violated of violation a. Jessica Alma has been serving as the senior auditor on the audit of Carolina BioHealth, Inc. Because of her outstanding work, the head of internal audit at Carolina BioHealth extended her an offer of employment to join the internal audit department as an audit manager. When the discussions with Carolina BioHealth began, Jessica informed her office's managing partner and was removed from the audit engagement. b. The audit firm of Miller and Yancy, CPAs, has joined an association of other CPA firms across the country to enhance the types of professional services the firm can provide. Miller and Yancy share resources with other firms in the association, including audit methodologies, audit manuals, and common IT systems for billing and time reporting. One of the partners in Miller and Yancy has a direct financial interest in the audit client of another firm in the association. c. Spencer Dunn is the partner in charge of the audit of Brentwood Bank. Dunn is in the process of purchasing a mountain house and has obtained mortgage financing from Brentwood Bank. d. Melanie Greer's audit client has a material investment in Summit, Inc. Greer's nondependent parents also own shares in Summit, and Summit is not an attest client of Greer's firm. The amount of her parent's ownership in Summit is not significant to Greer's net worth. (Click the icon to view the possible explanations of violations.)Violation Explanation Situation of Code? If Yes - Rule(s) violated of violation e. Joe Pugh is a former partner in Pinnacle and Hughes, CPAs. Recently, he left the firm to become the chief operating officer of Ensworth Clothing, Inc., which is an audit client of Pinnacle and Hughes. In his new role, Pugh has no responsibilities for financial reporting. Pinnacle and Hughes made significant changes to the audit plan for the upcoming audit. f. Odonnel Incorporated has struggled financially and has been unable to pay the audit fee to its auditor, Seale and Seale, CPAs, for the 2017 and 2018 audits. Seale and Seale is currently planning the 2019 audit. g. Morris and Williams, a regional CPA firm, is providing information systems consulting to one of their publicly traded audit clients. They are assisting in the implementation of a new financial reporting system selected by management. h. Chris Lancaster is a financial analyst in the financial reporting department of Cockerham International, a privately held corporation. Chris was asked to prepare several journal entries for Cockerham International related to transactions that have not yet occurred. The entries are reflected in financial statements that the company recently provided to the bank in connection with a loan outstanding due to the bank.1. When audit firms create a network with other firms to share certain characteristics, such as the sharing of audit methodologies and audit manuals, interpretations of the Code require each network firm to be independent of audit and review clients of other network firms. The ownership by a firm who are partners in one of the network firms in the stock of a client of another network firm would impair independence. 2. When audit firms create a network with other firms to share certain characteristics, such as the sharing of audit methodologies and audit manuals, interpretations of the Code require each network firm to be independent of audit and review clients of other network firms. The ownership by a firm who are partners in one of the network firms in the stock of a client of another network firm would impair objectivity and client confidentiality. 3. An interpretation of the Code prohibits the inclusion of indemnification clauses and other limitations of liability provisions in engagement letters for audit and other attest services. 4. An investment by a client in a firm that is also an investment of a related party to the CPA firm constitutes a violation of independence according to interpretations of the Code. 5. An interpretation of the code states that no member of top-level-management can be a former employee of the auditing firm. 6. Interpretations and rulings note that independence is impaired if billed or unbilled fees remain unpaid for professional services provided more than six months before the date of the auditor's report. 7. Interpretations and rulings note that independence is impaired if billed or unbilled fees remain unpaid for professional services provided more than one year before the date of the auditor's report. 8. Only new and pre-existing mortgage loans provided by a new audit client that is a bank are permissible. 9. Only pre-existing mortgages provided by a new audit client that is a bank are permissible. No new mortgage loans are permitted, however. 10. Being offered a job from a client constitutes a discreditable act. 11. The Code prohibits the solicitation and disclosure of the Uniform CPA examination questions and answers without permission of the AICPA. 12. Two rules are violated whereby an individual knowingly included false and misleading transactions in the financial statements that were provided to the bank. 13. Setting a fee based on financial results is in violation of multiple rules of the Code. 14. Providing financial information systems design and implementation services to a publicly-traded client is prohibited under independence rules

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