Codes of professional conducts include a list of principles and regulations which define the set of standards of ethic and professional behavior that is required for each member of the entity. It gives the general outline for the institute and its members, how they should behave and perform. To discuss: Whether the situation is violated or not. American Institute of Certified Public Accountants (AICPA): American institute of certified public accountant is a national professional organization that set the ethical principles for the institution and professions. AICPA also have rules for the auditor independence that describe the client as the result of the action or relationship. The following situations describe such actions that violate the independence rule or not. YES, it violates the independence as dependent parents come under the immediate family and a cover member is not independent if they have direct financial interest in the client. NO, it does not violate the independence because if a covered member or member of immediate family is in a key position of an entity, then the covered member is not independent of an audit engagement. YES, it violates the independence as the close relative party is aware about the material investment. The covered member cannot hold the financial interest if the financial interest is indirect and investment is material. NO, it does not violate the independence as the financial interest is indirect and covered members may not be aware about investment then they can hold the financial interest.

Question

Want to see the full answer?

Answer 1

Question

Chapter 19, Problem 19.29P

To determine

Concept Introduction:

Codes of professional conducts include a list of principles and regulations which define the set of standards of ethic and professional behavior that is required for each member of the entity. It gives the general outline for the institute and its members, how they should behave and perform.

To discuss:Whether the situation is violated or not.

American Institute of Certified Public Accountants (AICPA): American institute of certified public accountant is a national professional organization that set the ethical principles for the institution and professions. AICPA also have rules for the auditor independence that describe the client as the result of the action or relationship. The following situations describe such actions that violate the independence rule or not.

YES, it violates the independence as dependent parents come under the immediate family and a cover member is not independent if they have direct financial interest in the client.

NO, it does not violate the independence because if a covered member or member of immediate family is in a key position of an entity, then the covered member is not independent of an audit engagement.

YES, it violates the independence as the close relative party is aware about the material investment. The covered member cannot hold the financial interest if the financial interest is indirect and investment is material.

NO, it does not violate the independence as the financial interest is indirect and covered members may not be aware about investment then they can hold the financial interest.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

9. Calculating Payments [LO3] The Bandon Pine Corporation's purchases from suppliers in a quarter are equal to 75 percent of the next quarter's forecast sales. The payables period is 60 days. Wages, taxes, and other expenses are 20 percent of sales, and interest and dividends are $110 per quarter. No capital expenditures are planned. Projected quarterly sales are shown here: Sales Q1 $2,250 Q2 $2,730 Sales for the first quarter of the following year are projected at $2,475. Calculate the company's cash outlays by completing the following: Payment of accounts Wages, taxes, other expenses Long-term financing expenses (interest and dividends) Total Q3 $2,390 Q4 $2,190 Q1 Q2 Q3 Q4

The average daily net transaction accounts of a local bank during the most recent reserve computation period is $341 million. The amount of average daily reserves at the Fed during the reserve maintenance period is $26.20 million, and the average daily vault cash corresponding to the maintenance period is $5.8 million. (Example13-2). a. Under the rules effective in 2020, what is the average daily reserve balance required to be held by the bank during the maintenance period? b. Is the bank in compliance with the reserve requirements?

What are the LSS and characteristics of LSS tools used in a research study? What is Lean Six Sigma and what is the possible benefits of using Lean Six Sigma? What are the seven LSS tools, could you please explain the characteristics of each tool, and state how the tool would be used to in a case study? How Lean Six Sigma brings a hint of all three traditional types of research (qualitative, quantitative, and mixed methods) to bear on Case Study research and business solutions?