For each of the situations listed, identify which of three principles (integrity, objectivity and independence, or due care) from the AICPA Code of Professional Conduct is violated. Assume allpersons listed in the situations are members of the AICPA. (Note: Refer to the AICPA Code ofProfessional Conduct contained on pages 25–27 in Chapter 1 for descriptions of the principles.)a. Reggie, the managing partner of an audit firm, has the authority to approve all transactions. As a result, he uses firm funds to purchase a new couch for his home.b. Taylor is a first-year auditor for a large public accounting firm. She is assigned to auditBike Global, a regional travel agency specializing in bike tours. Taylor does not discloseto her firm that her mother is a co-owner of Bike Global, since Taylor knows that shewill not allow herself to be influenced by her mom.c. Rick has been working for his company for ten years and is required to attend internal control training annually. Rick does not attend the training this year because he feels he alreadyunderstands the policies. Significant policy updates have occurred during the past year.d. Brooke, an accounts payable clerk, must have her manager sign off on all checks over$10,000. Her manager is out of the office this week, so Brooke forges her manager’ssignature to make sure the check is sent out on time.
For each of the situations listed, identify which of three principles (integrity, objectivity and independence, or due care) from the AICPA Code of Professional Conduct is violated. Assume all
persons listed in the situations are members of the AICPA. (Note: Refer to the AICPA Code of
Professional Conduct contained on pages 25–27 in Chapter 1 for descriptions of the principles.)
a. Reggie, the managing partner of an audit firm, has the authority to approve all transactions. As a result, he uses firm funds to purchase a new couch for his home.
b. Taylor is a first-year auditor for a large public accounting firm. She is assigned to audit
Bike Global, a regional travel agency specializing in bike tours. Taylor does not disclose
to her firm that her mother is a co-owner of Bike Global, since Taylor knows that she
will not allow herself to be influenced by her mom.
c. Rick has been working for his company for ten years and is required to attend internal control training annually. Rick does not attend the training this year because he feels he already
understands the policies. Significant policy updates have occurred during the past year.
d. Brooke, an accounts payable clerk, must have her manager sign off on all checks over
$10,000. Her manager is out of the office this week, so Brooke forges her manager’s
signature to make sure the check is sent out on time.
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