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 The dependent-son of a partner in a CPA firm owns ten shares of Rule Violated A. |1. Accounting principles. stock in an audit client. In preparing a tax return, a CPA takes a deduction at the client's request that the CPA believes is not justified. B. 2. Acts discreditable. c. A CPA robs a bank. Advertising and other 3. forms of solicitation. A CPA owns 100 shares in a consulting client for which the firm provides no attest services. A CPA charges an audit fee that depends on the amount of credit the client obtains. Commissions and 4. referral fees. Compliance with E. 5. standards. F. A CPA advertises in a local newspaper. Confidential client 6. information. A client knowingly issues financial statements that inappropriately and materially depart from standard. A CPA and the president of an audit client both have an immaterial H. joint investment in another company. The CPA firm provides no services for the other company. A CPA discloses information about a client because the information was subpoenaed. A CPA does not follow generally accepted auditing standards in the audit of a nonpublic company. G. 7. Contingent fees. 8. Independence. 9. Integrity and objectivity. 10. No violation.
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 The dependent-son of a partner in a CPA firm owns ten shares of Rule Violated A. |1. Accounting principles. stock in an audit client. In preparing a tax return, a CPA takes a deduction at the client's request that the CPA believes is not justified. B. 2. Acts discreditable. c. A CPA robs a bank. Advertising and other 3. forms of solicitation. A CPA owns 100 shares in a consulting client for which the firm provides no attest services. A CPA charges an audit fee that depends on the amount of credit the client obtains. Commissions and 4. referral fees. Compliance with E. 5. standards. F. A CPA advertises in a local newspaper. Confidential client 6. information. A client knowingly issues financial statements that inappropriately and materially depart from standard. A CPA and the president of an audit client both have an immaterial H. joint investment in another company. The CPA firm provides no services for the other company. A CPA discloses information about a client because the information was subpoenaed. A CPA does not follow generally accepted auditing standards in the audit of a nonpublic company. G. 7. Contingent fees. 8. Independence. 9. Integrity and objectivity. 10. No violation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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
The dependent-son of a partner in a CPA firm owns ten shares of
А.
1. Accounting principles.
stock in an audit client.
In preparing a tax return, a CPA takes a deduction at the client's
В.
request that the CPA believes is not justified.
2. Acts discreditable.
Advertising and other
3.
forms of solicitation.
c. A CPA robs a bank.
A CPA owns 100 shares in a consulting client for which the firm
provides no attest services.
A CPA charges an audit fee that depends on the amount of credit
the client obtains.
Commissions and
4.
referral fees.
D
Compliance with
standards.
E.
5.
F. A CPA advertises in a local newspaper.
Confidential client
6.
information.
A client knowingly issues financial statements that inappropriately
G.
7. Contingent fees.
and materially depart from standard.
A CPA and the president of an audit client both have an immaterial
H. joint investment in another company. The CPA firm provides no
services for the other company.
8. Independence.
A CPA discloses information about a client because the information
1.
was subpoenaed.
9. Integrity and objectivity.
A CPA does not follow generally accepted auditing standards in the
J.
audit of a nonpublic company.
10. No violation.
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