You are a CPA working for a local firm and are assigned the 2015 tax return of Cindy Robertson. In reviewing the data Cindy submitted to the firm, you see she did not report dividend income or gains from the sale of stock. However, you recently prepare the 2015 gift tax return of Cindy's Aunt Linda. In that return, Linda report a gift of stock to Cindy on January 26, 2015. The stock had a FMV of $50,000 and Linda's basis in the stock (which became Cindy's basis) was $5,000. What are your obligations under the Statements on Standards for Tax Services (see aicpa.org)? What standards may apply to this situation and what might result from applying the standard? What will you do?

Dan is a CPA for a large regional firm. In preparing the tax return for a client, he notices the firm has an unusually high amount of travel, meal and entertainment expenses. As a result, he decides to examine the supporting documentation and notices that the business purpose for many of the meals is not provided. When Dan questions the client's Controller, Tom, Tom assures him that all the M&E expenses are legitimate. After further examination, Dan finds that for every business day in June, July and August, 4 of the corporation's senior officers have been reimbursed for their lunch and dinner costs. Dan confronts the controller again and informs Tom that his firm will not prepare the tax return unless the M&E that do not have a business purpose are omitted. Tom, the controller, angrily tells Dan to prepare the return as agreed to in their contractual engagement letter and he will take it from there. He said this in front of the Assistant Controller, Daisy. Dan is golfing with Daisy that weekend and asks Daisy what Tom meant by "he will take it from there". Daisy says he intends to replace the M&E number on the tax return prepared by Dan with the total M&E expense amount he originally gave Dan. Can Dan prepare the tax return, knowing that the company will change the M&E expense? If he does prepare the return, what ethical standards will he violate (if any) (refer to the Statements on Ethical Standards at aicpa.org)? Assume he prepares the return. If asked, should he prepare next year's return?