Carlos Monte, a retired partner of your CPA firm has just been appointed to the Board of Directors of Fame Corporation, your firm’s client. Monte is also an ex officio member of your firm’s income tax advisory committee which meets monthly to discuss income tax problems of the partnership’s clients, some of which are competitors of Fame Corporation. The partnership pays Monte P 1,000 for each committee meeting attended and a monthly retirement benefit, fixed by a retirement plan policy of P 10,000. State whether the action or situation shows violation of the Revised Code of Ethics for Professional Accountants, explain why, and cite the relevant rule and interpretation.
Carlos Monte, a retired partner of your CPA firm has just been appointed to the Board of Directors of Fame Corporation, your firm’s client. Monte is also an ex officio member of your firm’s income tax advisory committee which meets monthly to discuss income tax problems of the partnership’s clients, some of which are competitors of Fame Corporation. The partnership pays Monte P 1,000 for each committee meeting attended and a monthly retirement benefit, fixed by a retirement plan policy of P 10,000. State whether the action or situation shows violation of the Revised Code of Ethics for Professional Accountants, explain why, and cite the relevant rule and interpretation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- Carlos Monte, a retired partner of your CPA firm has just been appointed to the Board of Directors of Fame Corporation, your firm’s client. Monte is also an ex officio member of your firm’s income tax advisory committee which meets monthly to discuss income tax problems of the
partnership ’s clients, some of which are competitors of Fame Corporation. The partnership pays Monte P 1,000 for each committee meeting attended and a monthly retirement benefit, fixed by a retirement plan policy of P 10,000. State whether the action or situation shows violation of the Revised Code of Ethics for Professional Accountants, explain why, and cite the relevant rule and interpretation.
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