Acct 3

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3-31 Ron Barber, CPA, is auditing the financial statements of DGF, Inc., a publicly held company. During the course of the audit, Barber discovered that DGF has been making illegal bribes to foreign government officials to obtain business, and he reported the matter to senior management and the board of directors of DGF.
a. If management and the board of directors take appropriate remedial action, should Barber be required to report the matter outside the company?
If they take the appropriate remedial action, then Barber is not required to report the matter outside the company. The company is able to report to SEC themselves within one business day and the auditors should get a copy if they did it.
b. Describe Barber’s appropriate
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About two months after the date of his opinion, Gilbert learned that an insurance company was planning to loan Grandtime $150,000 in the form of a first-mortgage note on the building. Realizing that the insurance company was unaware of the existing lien on the building, Gilbert had Bradley notify the insurance company of the fact that Grandtime’s building was pledged as collateral for a term note.
Shortly after the events described above, Gilbert was charged with several violations of professional ethics.
Identify and discuss at least four ethical implications of those acts by Gilbert that were in violation of the AICPA Code of Professional Conduct.
Gilbert was breaking rule 102 in the code of professional conduct. Rule 102 is integrity and objectivity, which states that if you shall not knowingly misrepresent facts. Which this happened when Gilbert noticed that the financial statements did not mention that building was collateral on a ten year not. He did not bring this up until after he found out an insurance company was going to loan the business money under false pretenses. Rule 202 was also not met because that is compliance with standards. In this rule it states that any and all findings are to be revealed to the client.
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