Rule 101 Independence Summary

This case implies that no auditor with the firm of Abernethy and Chapman has an in-depth understanding of the consumer electronics industry. Is a CPA firm allowed to accept an engagement without having established the necessary expertise to oversee the audit? The first

July 1, and the next day 12 of the 13 colonies adopted Lee’s resolution for independence. The process of consideration and revision of Jefferson’s declaration (including Adams’ and Franklin’s corrections) continued on July 3 and into the late morning of July 4, during which Congress deleted and revised some one-fifth of its

the united states of America is a nation that was born through war and rebellion. the most important artifact that declares we are a free country is that of the decleration of independence. Occording to archives.gov "the decleration of independence was drafted by "Committee of Five" (John Adams, Roger Sherman, Benjamin Franklin, Robert Livingston, and Thomas Jefferson) drafted the Declaration of Independence. Thomas Jefferson drafted it, Adams and Franklin made changes to it. Congress reconvened on July 1, 1776." the decleration was intended to tell their people that they were free and to tell the many countries especially the english. according to classroom.monticello.org the artifact was created to state as to why the colonies wanted to be

Sarah, president and general manager, would like to expand the business and wants to secure a $150,000 loan in order to achieve this goal. Before the loan can be approved, Sarah’s banker has requested that the corporate financial statements of Smackey Dog Foods, Inc. be audited. Keller CPAs has been hired to audit the corporate

The potential ethical dangers for an auditing firm that provides tax shelters for an audit client includes helping wealthy clients avoid

Privity of contract law restricts third party users of suing a professional. This law, however, has narrow scope and therefore new methods have emerged in order to protect third-party users. The first test is called the Ultramares test. Under this test, the third party must be a foreseeable user of the information provided by the accountant. First the CPA must know the name of the party using the information, the purpose, the extent of use, and the client intents to deliver this information primarily to the third party. In this case the CPA was not aware of the name of any third party user, but knew the end users would be investors, he knew that it would be used for an IPO since he audited the financials used in the registration statement. As a result, a judge would must likely find the CPA liable, however since he did not know the names of the third party, that can serve as a defense.

6. When a CPA firm has two audit clients that transact business with each other should the two audit teams be allowed to share information regarding their clients?

The duty of professionals, including accountants, lawyers, and brokers is to provide services by exercising their skills and knowledge in compliance with their respective laws and standards. However, Certified Public Accountants, how their title implies owe a duty to the public, including direct and indirect users of their work. In this case I, the CPA, have several duties to which I may be liable for under civil and criminal liability, including common and statutory law. In this section I will examine any common law liabilities that may be used in this case by both clients and third parties and any defense I may consider.

According to Ethical Ruling No. 100.18, financial self-interest threat, a potential benefit to a member from a financial interest in or from some other financial relationship with an attest client would be unethical for having a direct financial interest or material indirect financial interest in the client (AICPA, 2013). Also, according to Ethical Ruling No. 101.2 Independence, Independence shall be considered to be impaired if someone had or was committed to acquire any direct or material indirect financial interest in the client (AICPA, 2013). With that being said, the CPA being asked by the client to evaluate various commercial service bureaus is not entirely independent or objective in this case because, several partners in the CPA’s firm has a material interest in the potential firm that will be referred to his client. This could also be a

4. Who are the auditors? How much are audit fees for the 2014 financial year?

To be careful “independent” under SOX rule, an audit committee member may not agree any consulting, review or other compensatory costs from the issuer or be an “associated person” of the issuer or a supplementary. requires companies to release whether they have a financial expert. Having someone with financial knowledge puts the audit committee in a stronger position to examination and task the company’s financial statements, decide that

Have you ever heard of the rule of junior high students not being allowed in the halls at lunch or break and that we can not bring our bags into the lunchroom. Well, this is a big problem that us junior high students have to deal with. We are very tired of running late to break and need to put our bags up so we can eat breakfast, however we can’t eat or put our stuff up because of that irrelevant rule. I know many of us are frustrated with this rule and would like it to change so here are three solutions to this problem.

The CPA firm of Adams, Barnes & Co. has audited the financial statements of Keystone Computers & Networks, Inc. for the past three years, 20X2, 20X3, and 20X4. The firm meets professional independence requirements as set forth in the Conceptual Framework for AICPA Independence Standards, ET Section 100.01. Our CPA firm already has working knowledge of the attitude of the principal owners, key management, and the chief financial officers, and has obtained background knowledge from previous audits. No issues exist relating to management integrity that may cause Adams, Barnes & Co. to refuse the audit engagement for 20X5.

This case illustrates the importance of following through on all duties allocated to the audit committee in its charter. These duties may be required by law or listing requirements or by delegation to the committee by the company’s Board. For example, as noted in Part I, Exhibit A, SEC Rule 10A-3(b)(3) requires each audit committee to establish procedures for the receipt, retention, and treatment of complaints received by the listed company regarding accounting, internal accounting controls, or auditing matters; and for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. NYSE rules require that the audit committee assist the board with oversight of the internal audit function and compliance with legal and regulatory requirements [See Exhibit C].

The key parties in the case are Martha, her supervisor, the Sales Director, the company and the employees of the company. Martha could potentially lose her CPA license, and her reputation is on the line. The public company could be fined for violating the GAAP policy and also have the risk of losing company reputation. The employees’ jobs are also at risk. Martha’s supervisor need to consider if this activity is exposed to be public, the supervisor would also be questioned and eventually lose her CPA license and reputation.