For each situation (1-5), identify the most applicable AICPA rule of conduct and whether there is a violation or no violation of the rule (A-F). One or more letters may not be used. A. Independence Rule; no violation B. Independence Rule violation C. Integrity and Objectivity Rule; no violation D. Integrity and Objectivity Rule; violation E. Accounting Principles Rule; no violation F. Accounting Principles Rule; violation 1. Sterling Stevens, CPA, was auditing Global Services Company. Global Services used an accounting principle that was not in conformity with GAAP. Nevertheless, Stevens rendered a standard unqualified audit report. 2. Christina Hall, CPA, provided expert testimony for a plaintiff. The defendant in the case was a client of Hall's. 3. Sam Miller, CPA, owned 100 shares of Johnson Drilling, Incorporated, his audit client. 4. Dewey Wise, CPA, obtained a loan from an insurance company using the cash value of the insurance policy as collateral. The loan is for less money than the cash value of the policy. 5. Stella Steinbeck, CPA, was auditing Good Services Company. Good Services used an accounting principle that was not in conformity with GAAP. Good Services believed, and Steinbeck concurred, that using a generally accepted method would cause the financial statements to be misleading. Therefore. Steinbeck rendered a standard unqualified audit report.
For each situation (1-5), identify the most applicable AICPA rule of conduct and whether there is a violation or no violation of the rule (A-F). One or more letters may not be used. A. Independence Rule; no violation B. Independence Rule violation C. Integrity and Objectivity Rule; no violation D. Integrity and Objectivity Rule; violation E. Accounting Principles Rule; no violation F. Accounting Principles Rule; violation 1. Sterling Stevens, CPA, was auditing Global Services Company. Global Services used an accounting principle that was not in conformity with GAAP. Nevertheless, Stevens rendered a standard unqualified audit report. 2. Christina Hall, CPA, provided expert testimony for a plaintiff. The defendant in the case was a client of Hall's. 3. Sam Miller, CPA, owned 100 shares of Johnson Drilling, Incorporated, his audit client. 4. Dewey Wise, CPA, obtained a loan from an insurance company using the cash value of the insurance policy as collateral. The loan is for less money than the cash value of the policy. 5. Stella Steinbeck, CPA, was auditing Good Services Company. Good Services used an accounting principle that was not in conformity with GAAP. Good Services believed, and Steinbeck concurred, that using a generally accepted method would cause the financial statements to be misleading. Therefore. Steinbeck rendered a standard unqualified audit report.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:For each situation (1-5), identify the most applicable AICPA rule of conduct and whether there is a violation or no violation of the rule
(A-F). One or more letters may not be used.
A. Independence Rule; no violation
B. Independence Rule violation
C. Integrity and Objectivity Rule; no violation
D. Integrity and Objectivity Rule; violation
E. Accounting Principles Rule; no violation
F. Accounting Principles Rule; violation
1. Sterling Stevens, CPA, was auditing Global Services Company. Global Services used an accounting principle that was not in
conformity with GAAP. Nevertheless, Stevens rendered a standard unqualified audit report.
2. Christina Hall, CPA, provided expert testimony for a plaintiff. The defendant in the case was a client of Hall's.
3. Sam Miller, CPA, owned 100 shares of Johnson Drilling, Incorporated, his audit client.
4. Dewey Wise, CPA, obtained a loan from an insurance company using the cash value of the insurance policy as collateral. The loan is
for less money than the cash value of the policy.
5. Stella Steinbeck, CPA, was auditing Good Services Company. Good Services used an accounting principle that was not in conformity
with GAAP. Good Services believed, and Steinbeck concurred, that using a generally accepted method would cause the financial
statements to be misleading. Therefore, Steinbeck rendered a standard unqualified audit report.
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