You have recently joined a Public Accounting firm as an audit trainee. In the first week with the firm you attended a training course. One of the sessions was on the importance of complying with the rules of professional conduct. The instructor presented the three hypothetical scenarios shown below:

Required

For this scenario discuss the acts by the Public Accountant (PA) and the PA friend that were in violation of the Rules of Professional Conduct. Explain why you think the acts were a violation.

Scenario 3

On June 15, 2020 Erica McBride, CPA and partner was offered and accepted the ngagement to audit the annual financial statements of Kwoktan Corporation for the year ended December 31, 2020. The audit began on October 1, 2020 and was substantially completed by March 13, 2021. Kwoktan Corporation is a public company listed on the Toronto Stock Exchange and has share capital of $55 million. Ms. McBride served as the corporate controller of Kwoktan from January 8, 2009 until February 5, 2020 at which time she terminated her employment with Kwoktan. Ms. McBride owned a material amount of Kwoktans common shares from January 8, 2009, until June 12, 2020, at which time she sold the shares.