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.
Q: Which of the following would not be considered confidential information obtained in thecourse of an…
A: In the course of an engagement, there are some confidential information for which client's consent…
Q: Which of the following is true?a. Members of an audit engagement team cannot speak with audit client…
A:
Q: Yolanda is the executive in charge of the Santa Fe office of Best & Co, an international…
A: Given case is: Yolanda is the executive in charge of the Santa Fe office of Best & Co, an…
Q: If the audit does not turn out favorably: (Select all that apply.) A. Mrs. Hubbard can…
A: The question is asking about the possible actions that Mrs. Hubbard can take if the results of an…
Q: When a CPA knows that a tax client has skimmed cash receipts and not reported the incomein the…
A: American Institute of Certified Public Accountants Rule of Conduct: American Institute of Certified…
Q: According to the AICPA Code of Conduct, which of the following acts is generally forbidden to CPAs…
A: According to the AICPA Code of Conduct, the following acts is generally forbidden to CPAs in public…
Q: In the normal course of performing their responsibilities,auditors often conduct audits or reviews…
A:
Q: Gloria and Deloria, CPAS, have recently started their public accounting firm and intend to provide…
A: Accounting Assumptions -A set of guidelines known as accounting assumptions guarantees that an…
Q: The Code of Conduct in use at a well-known national tax preparation firm says that if you are…
A: Ethics are related to the norms and principles followed by the company in dealing with customers and…
Q: KPMG is the auditor for an IESBA public interest entity audit client. Which non-audit service is…
A: The question is asking which non-audit service is allowed for a public interest entity audit client…
Q: engagement. Smith and Johns would most probably inquire the predecessor auditor about the following…
A: Audit :- Companies record the transactions of the business everyday from the date of starting the…
Q: Explain what is meant by determining the degree of correspondencebetween information and established…
A: To do an audit, there must be information in a verifiable form and some standards(criteria) by which…
Q: Your firm proposes to assist Company X (a tax client) in a possible acquisition. When evaluating a…
A: The AICPA stands for the American Institute of Certified Public Accountants. It is the professional…
Q: As part of the ongoing audit of Winter Enterprises, the external auditor, Ghassan CPAS are reviewing…
A: An audit is an independent examination of financial information of any entity, whether profit…
Q: You are the auditor partner for the AAA audit firm, tendering for the audit of Howard Ltd for the…
A: There are five major risks in the auditing profession that can undermine the integrity of an…
Q: CCC Partners is negotiating with its audit client, Muir Industries, for the audit fees for the…
A: According to section 142 of the Companies Act 2013, the pay of the company's auditors (other than…
Q: Each of the following situations involves a possible violation ofthe AICPA Code of Professional…
A: Accountant: Accountant is the qualified and professional individual appointed by the company for the…
Q: Assume that an auditor makes an agreement with a client that the audit fee will be contingent upon…
A: Audit: It is a systematic examination of books of accounts of an individual or a firm. It is done by…
Q: You are an Audit Manager for a CPA firm that is assigned to audit the ABC company. Near the middle…
A: Ans. There is a code of conduct in audit for auditors that speaks about independence in an audit.
Q: Langford & Company, CPAs were approached to report on summary financial statements. The summary…
A: The primary distinction between the tax basis and GAAP-basis financial statements is that tax basis…
Q: ethics question based on AICPA standards: Assume that the CPA firm of Packers and Vikings audits…
A: American Institute of Certified Public Accountants ( AICPA) sets a Code of Professional Conduct that…
Q: Who among the following is not a "covered member" for purposes of the Sarbanes CPA firm's audit of…
A: A "covered member" is a term used in auditing and accounting to refer to individuals or entities…
Q: Who are the parties potentially affected by this audit and the fee plan proposed? What are the…
A: Disclaimer : “Since you have posted a question with multiple sub-parts, we will solve first…
Q: The relationship would be immaterial to both BDO and the client. Is this permitted under SEC rules?
A: In order to guarantee that auditors remain impartial, SEC independence regulations govern the…
Q: Which of the following acts by a CPA would be most likely to be a violation of the AICPA Code of…
A: The American Institute of Certified Public Accountants (AICPA) is a non-profit professional…
Q: Tana Thorne works in a public accoungting firm and hopes to eventually be a partner. The management…
A: Ethics play a very important role in business at large, but particularly so in Audit since it forms…
Q: Indicate whether the following statements are "True" or "False" regarding AICPA Statements on…
A: AICPA Statements on Standards for Tax Services The Statements are enforceable standards of…
Q: Under which of the following circumstances may member May charge a client a contingent fee? Group…
A: The general rule is that CPAs are not allowed to charge contingent fees for tax services, there is…
Q: ethical or unethical) on the following computations of the auditor's fee:
A: [Note: Since you have posted multiple questions, we will solve the first question for you. For the…
Q: Susan Wang is the audit partner for the financial report audit of Macro Ltd for the year ended 30…
A: Here to provide the details of the audit procedures which are implied for the different situation…
Q: ditor X tried to convince the management the importance of external confirmations; however the…
A: Facts of the case: Biccue Private Ltd recognises revenues when the goods are received by the…
Q: Your firm is proposing on an engagement to help Company X (a tax client) consider whether to acquire…
A: If a conflict of interest exists, a member (or a firm) shall not perform professional services…
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.
Step by step
Solved in 2 steps
- Under which of the following circumstances may member May charge a client a contingent fee? Group of answer choices a. May audits ABC Co. and wishes to charge it a contingent fee for the audit work. b. May audits ABC Co. and wishes to charge it a contingent fee for separate consulting work. c. May is examining prospective financial information for XYZ Co. and wishes to charge it a contingent fee for unrelated consulting services. d. May prepares TUV Co.’s tax returns and wishes to charge it a contingent fee for nontax consulting services.KPMG is the auditor for an IESBA public interest entity audit client. Which non-audit service is permitted for this type of audit client? Designing a technology system for financial reporting that generates information significant to the accounting records. Preparing annual tax returns subject to review by the client and appropriate assessment of threats and safeguards. Valuations that might create a self-review threat. Tax calculations for the purpose of preparing the accounting entries included in the financial statements on which the firm will express an opinion.Which of the following acts by a CPA would be most likely to be a violation of the AICPA Code of Professional Conduct? Select one: A “covered member” owns an immaterial amount of stock in an audit client. Accepting a fee in a tax matter that is contingent upon the result of an administrative proceeding. Assisting a client in preparing a financial forecast. Forming a professional corporation to practice as a CPA.
- Your firm is proposing on an engagement to help Company X (a tax client) consider whether to acquire Company Y, your former audit client. You have determined that a conflict of interest exists and that safeguards can be applied to reduce threats to an acceptable level. You are planning to discuss the matter with Company Y tomorrow. What action does the AICPA code require in this situation?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…Indicate whether the following statements are "True" or "False" regarding AICPA Statements on Standards for Tax Services. a. The Statements are enforceable standards of professional practice for AICPA members working in state or Federal tax practice. b. In preparing a return, a CPA must verify information furnished by the client or by third parties. c. A CPA should make a reasonable effort to obtain from the client, and provide, appropriate answers to all questions on a tax return before signing as preparer. d. The CPA should not take a questionable position based on the probabilities that the client's return will not be chosen by the IRS for audit. e. A CPA may prepare a tax return using estimates received from a taxpayer if it is impracticable to obtain exact data.
- Assume that an auditor makes an agreement with a client that the audit fee will be contingent upon the number of days required to complete the engagement. Is this a violation of the AICPA Code of Professional Conduct? What is the essence of the rule of professional conduct dealing with contingent fees, and what are the reasons for the rule?Explain what is meant by determining the degree of correspondencebetween information and established criteria. What are the information and establishedcriteria for the audit of Jones Company’s tax return by an internal revenue agent? Whatare they for the audit of Jones Company’s financial statements by a CPA firm?Each of the following situations involves a possible violation ofthe AICPA Code of Professional Conduct. For each situation, state the applicable section ofthe rules of conduct and whether it is a violation.a. Emrich, CPA, provides tax services, management advisory services, and bookkeepingservices and also conducts audits for the same nonpublic client. Because the firm issmall, the same person often provides all the services.b. Franz Marteens is a CPA, but not a partner, with 3 years of professional experiencewith Roberts and Batchelor, CPAs. He owns 25 shares of stock in an audit client ofthe firm, but he does not take part in the audit of the client, and the amount of stockis not material in relation to his total wealth.c. A nonaudit client requests assistance of M. Wilkenson, CPA, in the installationof a local area network. Wilkenson had no experience in this type of work andno knowledge of the client’s computer system, so he obtained assistance from acomputer consultant. The…
- Which of the following is true?a. Members of an audit engagement team cannot speak with audit client officers about matters outside the scope of the audit while the audit engagement is in progress.b. Audit team members who leave the public accounting firm for employment with auditclients can provide audit efficiencies (next year) because they are very familiar with thefirm’s audit plans.c. Audit team partners who leave the public accounting firm for employment with auditclients can retain variable annuity retirement accounts established in the person’s formerfirm retirement plan.d. The public accounting firm must discuss with the audit client’s board or its audit committee the independence implications of the client’s having hired the audit engagement teammanager as its financial vice president.Which of the following would not be considered confidential information obtained in thecourse of an engagement for which the client’s consent would be needed for disclosure?a. Information about whether a consulting client has paid the CPA’s fees on time.b. The actuarial assumptions used by a tax client in calculating pension expense.c. Management’s strategic plan for next year’s labor negotiations.d. Information about material contingent liabilities relevant for audited financial statementsA BDO audit client subject to SEC independence rules make financial reporting software. The audit client wants BDO to become a reseller of their software. The terms would be the same as those offered to any other reseller. The relationship would be immaterial to both BDO and the client. Is this permitted under SEC rules? Yes, because it is immaterial to both parties. No, because reseller arrangements are business relationships and the SEC does not permit the audit firm to have a business relationship with an audit client. Yes, because BDO is not the only reseller and would be offered the same terms as any other reseller.