our tax firm has acted on behalf of Mr Smith for many years and was approached by GoMo Limited to provide advice on the company’s purchase of shares in MoFin Ltd. In accordance with the Accounting Profession’s “professional code of conduct”, explain the steps your firm should have taken when agreeing to act for GoMo Limited and explain how your firm should manage any conflicts of interest.

our tax firm has acted on behalf of Mr Smith for many years and was approached by GoMo Limited to provide advice on the company’s purchase of shares in MoFin Ltd. In accordance with the Accounting Profession’s “professional code of conduct”, explain the steps your firm should have taken when agreeing to act for GoMo Limited and explain how your firm should manage any conflicts of interest.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

As part of the ongoing audit of Winter Enterprises, the external auditor, Ghassan CPAS are reviewing the client's balance sheet. An audit manager has noticed a contingent liability on the balance sheet, with an associated note explaining the client believes they may be the subject of litigation in the near future. What would be the auditor's best course of action at this juncture? O Directly contact the client's legal counsel and attempt to obtain further details of the potential litigation. This should be done independently of the client and without the client's knowledge so management cannot alter any documentation or attempt to influence the external legal counsel. Request written assurances from top management, indemnifying the external auditors from any lawsuits filed against the client. Request permission from the client's management to contact the client's legal counsel and discuss the details of this potential litigation. Immediately advise the client in writing of the…
The following relates to the Menendez–Halliburton situation described in the text.(a) How would you characterize Halliburton’s accounting for revenue from ethical and professional perspectives?(b) Once KPMG learned that Menendez had provided a complaint to Halliburton’s audit committee highlighting questionable accounting and auditing practices, the KPMG audit partner instructed the audit team members to avoid communications with Menendez. How would you characterize those actions ethically and professionally?
Certified Public Accountants (CPA) have imposed a rigorous code of conduct on themselves. A CPA engaged in the practice of public accounting can be a stockholder/shareholder of the company he is auditing. Select one: True False
You are the CFO of Clarke Company, which is publicly traded. At the annual shareholders’ meeting, you discussed the company’s recent reported results. As part of your presentation, you illustrated the minimum and maximum values for net income that Clarke could have reported using a range of accounting assumptions other companies in your industry use. Your statement prompted a cry of outrage from one of the shareholders present at the meeting, who accused you of being an unprincipled liar. This shareholder stated that any suggestion that there is a range of possible net income values for a given company in a given year indicates an overly liberal approach to financial reporting. This shareholder has moved that your employment contract be immediately terminated because of an apparent lack of moral character. The shareholder’s arguments have been persuasive to a large number of people at the meeting. What can you say to defend yourself?
ethics question based on AICPA standards: Assume that the CPA firm of Packers and Vikings audits Chai Bears Systems. The controller of Chai, a CPA, happens to be a tax expert. During the current tax season, Packers and Vikings get far behind in reviewing processed tax returns. It does not want to approach clients and ask permission to file for an extension to the April 15 deadline so the firm approaches the controller of Chai and offers him a temporary position as a consultant for the tax season. Was it ethical for the firm to make the offer? Would it be ethically acceptable for the controller to accept the position?
What is a good response to? A shareholder has a non-controlling interest in a company if the shareholder does not own enough equity in the company to shape decision-making at the firm (Hayes, 2024; “Non-controlling”, 2024). In order to determine the shareholder’s non-controlling interest balance in a company at the start of the period, the accountant first calculates the fair value of the non-controlling interest. Next, the employee calculates the change in the company’s retained earnings that is proportional to the non-controlling interest (Hoyle et al., 2024). The accountant adds this number to the fair value of the non-controlling interest. Then, the employee subtracts the excess fair value amortizations that are proportional to the non-controlling interest from the aforementioned amount (Hoyle et al., 2024). The result is the non-controlling interest balance at the start of the period. To calculate the non-controlling interest balance at the end of the period, the accountant adds…
You are negotiating a transaction for your client, Shark Corporation. Parties on the other side of the deal ask you for information about the structural stability of a building, which is a significant part of the transaction. Coleman, Shark’s tax director, tells you to say that everything is all right when the building has substantial hidden damage. Coleman tells you to say this because it would be more favorable to Shark’s position in the transaction. How would you respond to Coleman’s request? Be sure to cite research that supports your position. What if you have already told the other side that the building is fine when you learn about the problems? What other potential ethics issues do you see in this situation? Which AICPA Code(s) of Professional Conduct rules apply in this situation (explain how and why they apply)?
1. List three types of records that a company must keep for tax purposes. 2. Explain why the ATO conducts audits. 3. List three key principles that should be followed when managing a work team
You have recently been appointed as auditor to Johnson Plc; a company whoseshares are traded on the Stock Exchange. The Directors of Johnson Plc haverecommended that you perform the following services .(i) The statutory audit of the annual financial statements.(ii) Taxation services, and(iii) Consistency services in respect of the implementation of a new informationtechnology systemYour firm has not acted for Johnson Plc before but does act as auditor for one of themajor competitors.Required. (b) What are the fundamental principles of ethics? Briefly explain their meaning
What is the required treatment of each of the below events in the financial statements? Justify your decisions. a) On 25 July 20X9, Carey settled and paid a claim involving prior employees alleging sexual discrimination as a result of promotions announced at the Christmas party in 20X8. Five women who had been overlooked for management promotions undertook legal action in March 20X9. b) On 1 August 20X9, Carey Ltd made an announcement to the Singapore Stock Exchange of its intention to take over a private engineering partnership. This would increase sales revenue of Carey Ltd by 15%. It was to be funded by a 1:10 rights issue. c) On 12 August 20X9, a fire damaged the head office of Carey. The buildings, fixtures and fittings were only partly insured. d) At its 5 September 20X9 meeting, Carey’s board of directors voted to double the advertising budget for the coming year and authorised a change in advertising agencies.
Ronald Partners is negotiating with its audit client (Maxim Industries) for its upcoming audit fees. Maxim Industries' audit partner offers the company a discounted audit fee if it also gives all its tax consulting work to the firm. Required Explain whether the managing partner at Ronald Partners should agree to approve the deal negotiated by the partner in charge of Maxim Industries' audit.