Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are the Partner-in-Charge of a large metropolitan office of a regional CIA firm. Two members of your professional staff have come to you to

You are the Partner-in-Charge of a large metropolitan office of a regional CIA firm. Two members of your professional staff have come to you to discuss problems that may affect the firms independence. Neither of these situations has been specifically answered by the AICPA Professional Ethics Division. Therefore, you must reach your own conclusions as to what to advise your staff members, and what actions, if any, are to be taken by the firm. Case 1: Don Moore, a partner in the firm, has recently moved into a condominium which he shares with his girlfriend. John Scott. Moore owns the condominium and pays all of the expenses relating to its maintenance. Otherwise, the two are self-supporting. Scott is a stockbroker, and recently she has started acquiring shares in one of the audit clients of this office of the CIA firm. The shares are held in Scotts name. at present, the shares are not material in relation to her net worth. Case 2: Mary Reed, a new staff auditor with no managerial responsibilities in the firm, has recently separated from her husband. Mary has filed for divorce, but the divorce cannot become final for least five months. The property settlement is being bitterly contested. Marys husband has always resented her professional career and has just used community properly to acquire one share of common stock in each of the publicly owned companies audited by the office in which Mary works. Required: For each case, you are to: a. Set forth arguments indicating that the firms independence has not impaired. b. Set forth arguments indicating that the firms independence has impaired. c. Express your personal opinion. Identify those arguments from part (a) or (b) that you found most persuasive. If you believe that the firms independence has been impaired, make suggestions as to how the problem might be resolved

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Finance: Theory And Practice

Authors: Eddie McLaney

6th Edition

9780273673569

More Books

Students also viewed these Accounting questions

Question

How should a consultant be selected?

Answered: 1 week ago

Question

Why is a consulting contract needed?

Answered: 1 week ago