Linda Malloy is a CPA with a passion for animals and volunteers 15 hours a week at an animal shelter. While she was originally asked to provide pro bono auditing help, these days she only provides hands-on care for abandoned and rescued puppies. One Saturday the shelter's director tells Linda that the puppies seem very agitated, and adds, "It's almost like they know what dire financial straits we are in right now and they are worried about landing back on the streets again." Linda senses an opportunity, and calls a friend she thinks might be interested in purchasing the shelter. She tells her friend, "I bet you can get the place for well under market value, since the owner is really stressed and needs to sell quickly." Which of the following statements is true? Select one: As a CPA, Linda is not permitted to provide volunteer or pro bono services, so has made a per se violation of the AICPA Code of Professional Conduct. Regardless of the physical labor she is providing at the shelter, Linda violated her duty of confidentiality to the shelter's current owner when she divulged the shelter's financial problems to the prospective buyer. Since she learned the confidential information while caring for puppies and not providing tax or auditing help, Linda owes the shelter's current owner no duty of confidentiality. Since Linda is not being paid by the shelter, she owes the shelter's current owner no duty of confidentiality.
Linda Malloy is a CPA with a passion for animals and volunteers 15 hours a week at an animal shelter. While she was originally asked to provide pro bono auditing help, these days she only provides hands-on care for abandoned and rescued puppies.
One Saturday the shelter's director tells Linda that the puppies seem very agitated, and adds, "It's almost like they know what dire financial straits we are in right now and they are worried about landing back on the streets again."
Linda senses an opportunity, and calls a friend she thinks might be interested in purchasing the shelter. She tells her friend, "I bet you can get the place for well under market value, since the owner is really stressed and needs to sell quickly."
Which of the following statements is true?
Select one:
As a CPA, Linda is not permitted to provide volunteer or pro bono services, so has made a per se violation of the AICPA Code of Professional Conduct.
Regardless of the physical labor she is providing at the shelter, Linda violated her duty of confidentiality to the shelter's current owner when she divulged the shelter's financial problems to the prospective buyer.
Since she learned the confidential information while caring for puppies and not providing tax or auditing help, Linda owes the shelter's current owner no duty of confidentiality.
Since Linda is not being paid by the shelter, she owes the shelter's current owner no duty of confidentiality.
Explanations:-
Option 1st:-
The AICPA Code of Professional Conduct allows CPAs to provide volunteer or pro bono services that are consistent with the profession's ethical standards. Therefore, Linda's volunteer work at the animal shelter is not a violation of the AICPA Code of Professional Conduct.
Option 2nd:-
As a CPA, Linda has a duty to maintain the confidentiality of her clients' financial information, and this duty extends to the animal shelter's current owner. By disclosing the shelter's financial problems to a prospective buyer, Linda violated this duty of confidentiality.
Option 3rd:-
Linda's duty of confidentiality to the shelter's current owner does not depend on the nature of her volunteer work at the shelter. As a CPA, Linda has a duty to maintain the confidentiality of her clients' financial information, and this duty extends to the animal shelter's current owner, regardless of how Linda learned the information.
Option 4th:-
Linda's duty of confidentiality to the shelter's current owner does not depend on whether or not she is being paid by the shelter. As a CPA, Linda has a duty to maintain the confidentiality of her clients' financial information, and this duty extends to the animal shelter's current owner, regardless of whether or not Linda is being paid by the shelter.
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