Audit Accounting 506– Professional Code of Conduct Case Assignment

ACC 506 – Professional Code of Conduct Case Assignment

pub.aicpa.org/codeofconduct

Research each of the following situations and resolve each to the extent possible. Provide the Rule of the Code of Professional Conduct as well as the section numbers of the Code which addresses the issue and your resolution to the issue – you need not consider the conceptual frameworks. Provide a paragraph explaining your findings/conclusions. (5 points each)

Martha Washington is the partner in charge of the Chicago office of Washington and Associates, CPAs. Martha asked you to research several issues related to Jefferson and Company, a potential new audit client.

1. Daniel Webster, a partner in the Chicago office, owns 100 shares of Jefferson and Company stock. The investment is immaterial to Daniel and he will not work on the engagement. If Daniel retains his investment, does it impair the CPA firm’s independence?

No it doesn't not because the stock is not material to Daniel. We do not know enough information to use the 5% rule so I assume it is under 5%. 1.240.010 rule

2. Abigail Adams is a manager in the Boston office; her father works as a sales agent for Jefferson and Company. Abagail will not work on the engagement. Does the Code allow Washington and Associates to audit Jefferson and Company if father and daughter retain their positions?

This is okay because Abigail's father does not have an audit sensitive position and Abigail is not involved in the audit. 1.270.020.02

3. If Washington and Associates obtains an engagement with Jefferson and Company, can Washington and Associates publicly disclose the fact that it audits Jefferson and Company?

Yes because this is not client confidential information. This is just stating that they audited them which is available to the public anyway. 1.700.050.02

4. The potential client contacted Martha as the result of an advertisement suggesting that Washington and Associates audits other “high tech” companies for...