Below are two independent scenarios involving professional standards. For each scenario students need to research the appropriate authoritative guidance and report their findings. Specifically, students need to use the “IRAC” format for reporting their research findings. That is, students need to identify the overarching “Issue” present for each scenario, identify and appropriately cite the applicable “Rule”. Students must then specifically demonstrate their understanding of how the rule applies to given scenario in an “Analysis” section and draw the necessary “Conclusion” with regard to the disposition of the issue identified.

Scenario 1: Ereq Sheldon is an audit partner for the public accounting firm EMJAE, LLP. While auditing ABC, a public company, Ereq became aware that EMJAE was not independent with regard to ABC. Accordingly, EMJAE’s audit report disclaimed an opinion on ABC’s financial statements. For the sake of transparency, the concurring partner noted that the report should also mention that EMJAE did perform limited procedures on the financial statements (i.e., provide negative assurance). Ereq agrees, but only because the reason for disclaimer was lack of independence.

Scenario 2: Qiana Syerre is a licensed CPA. One of her clients Fowren, has significant overseas operations. Fowren’s foreign financial statements need to be restated for general price-level changes. Fowren has asked Qiana how the deferred tax expense should be calculated.