Select the rule violated of the Code of Professional Conduct in the second column. If no rule is violated select 10-no violation (this may be used once, more than once, or not at all). Rules 1 through 9 may be used either once, or not at all.

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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The following is a list of circumstances that might be faced by a public accounting firm. Select the rule violated of the Code of Professional Conduct in the second column. If no rule is violated select 10-no violation (this may be used once, more than once, or not at all). Rules 1 through 9 may be used either once, or not at all.
 
  

Circumstance

Rule Violated

A.

The dependent-son of a partner in a CPA firm owns ten shares of stock in an audit client.

1.

Accounting principles.

B.

In preparing a tax return, a CPA takes a deduction at the client’s request that the CPA believes is not justified.

2.

Acts discreditable.

C.

A CPA robs a bank.

3.

Advertising and other forms of solicitation.

D.

A CPA owns 100 shares in a consulting client for which the firm provides no attest services.

4.

Commissions and referral fees.

E.

A CPA charges an audit fee that depends on the amount of credit the client obtains.

5.

Compliance with standards.

F.

A CPA advertises in a local newspaper.

6.

Confidential client information.

G.

A client knowingly issues financial statements that inappropriately and materially depart from standard.

7.

Contingent fees.

H.

A CPA and the president of an audit client both have an immaterial joint investment in another company.  The CPA firm provides no services for the other company.

8.

Independence.

I.

A CPA discloses information about a client because the information was subpoenaed.

9.

Integrity and objectivity.

J.

A CPA does not follow generally accepted auditing standards in the audit of a nonpublic company.

10.

No violation.

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