The accounting firm of Smith & Black, CPAs, is negotiating a fee with a new audit client where the client will pay $50,000 if the client obtains the line of credit needed for working capital purposes. Otherwise, the fee will be $40,000.

Brad Barns, CPA, was traveling from Las Vegas to the Grand Canyon when he was pulled over by a police officer for suspicion of driving under the influence. He was convicted in court of driving under the influence of alcohol and received six months probation.

Manuel Lopez, CPA, is a senior in a small, local, CPA firm that audits Childress, Inc., a closely held corporation. Manuel's sister was recently appointed as the controller for Childress,

Inc.

11. Jennifer Harris, CPA, is a partner in the CPA firm that audits Alltech, Inc., a closely held corporation. Jennifer's sister-in-law is the chief financial officer at Alltech, Inc.

Rule:

Violation? Yes No