Other Responsibilities and Practices Cases. Read the following cases. For each, statewhether the action or situation shows a violation or potential for violation of the AICPACode of Professional Conduct; if so, explain why, and cite the relevant rule.a. CPA Ron Stout completed a review of the unaudited financial statements of Wolfe Gifts.Arvida Wolfe was very displeased with the report. An argument ensued, and she toldStout never to darken her door again. Two days later, she telephoned Stout and demandedthat he return (1) Wolfe’s cash disbursement journal, (2) Stout’s documentation scheduleof adjusting journal entries, (3) Stout’s inventory analysis documentation, and (4) allother documentation prepared by Stout. Wolfe had not yet paid her bill, so Stout repliedthat state law gave him a lien on all of the records and he would return them as soon asshe paid his fee.b. CPA O’Dell May teaches a CPA review course at the university. He needs problem andquestion material for students’ practice, but the CPA examination questions and answersare no longer published. He pays $5 to students who take the exam for each question theycan “remember” after taking the examination.c. CPA Kelsey Blitz has been invited to conduct a course in effective tax planning for theCity Chamber of Commerce. The chamber’s president said a brochure would be mailedto members giving the name of Blitz’s firm, Blitz’s educational background and degreesheld, professional society affiliations, and testimonials from participants in the courseheld last year comparing Blitz’s excellent performance with other CPAs who have offeredcompeting courses in the city.d. CPA Reece Philby is a member of the state bar whose practice is a combination of lawand accounting and is heavily involved in estate planning engagements. Philby’s letterhead has the following: Member, State Bar of Illinois, and Member, AICPA.e. The public accounting firm of Burgess & Maclean (B&M) has made a deal with Brit &Company, a firm of management consulting specialists, for mutual business advantage.B&M agreed to recommend Brit to clients who need management consulting services.Brit agreed to recommend B&M to clients who need improvements in their accountingsystems. During the year, both firms would keep records of fees obtained by these mutualreferrals. At the end of the year, Brit and B&M would settle the net differences based ona referral rate of 5 percent of fees.f. Jack Robinson and Archie Robertson (both CPAs) are not partners, but they have thesame office, the same employees, and a joint bank account and work together on audits.A letterhead they use shows both their names and the description “Members, AICPA.”g. CPA Lou Dewey retired from the two-person firm of Dewey & Cheatham (D&C). Oneyear later, D&C merged practices with Howe & Company to form a regional firm underthe name of Dewey, Cheatham, & Howe Company

Question

Other Responsibilities and Practices Cases. Read the following cases. For each, state
whether the action or situation shows a violation or potential for violation of the AICPA
Code of Professional Conduct; if so, explain why, and cite the relevant rule.
a. CPA Ron Stout completed a review of the unaudited financial statements of Wolfe Gifts.
Arvida Wolfe was very displeased with the report. An argument ensued, and she told
Stout never to darken her door again. Two days later, she telephoned Stout and demanded
that he return (1) Wolfe’s cash disbursement journal, (2) Stout’s documentation schedule
of adjusting journal entries, (3) Stout’s inventory analysis documentation, and (4) all
other documentation prepared by Stout. Wolfe had not yet paid her bill, so Stout replied
that state law gave him a lien on all of the records and he would return them as soon as
she paid his fee.
b. CPA O’Dell May teaches a CPA review course at the university. He needs problem and
question material for students’ practice, but the CPA examination questions and answers
are no longer published. He pays $5 to students who take the exam for each question they
can “remember” after taking the examination.
c. CPA Kelsey Blitz has been invited to conduct a course in effective tax planning for the
City Chamber of Commerce. The chamber’s president said a brochure would be mailed
to members giving the name of Blitz’s firm, Blitz’s educational background and degrees
held, professional society affiliations, and testimonials from participants in the course
held last year comparing Blitz’s excellent performance with other CPAs who have offered
competing courses in the city.
d. CPA Reece Philby is a member of the state bar whose practice is a combination of law
and accounting and is heavily involved in estate planning engagements. Philby’s letterhead has the following: Member, State Bar of Illinois, and Member, AICPA.
e. The public accounting firm of Burgess & Maclean (B&M) has made a deal with Brit &
Company, a firm of management consulting specialists, for mutual business advantage.
B&M agreed to recommend Brit to clients who need management consulting services.
Brit agreed to recommend B&M to clients who need improvements in their accounting
systems. During the year, both firms would keep records of fees obtained by these mutual
referrals. At the end of the year, Brit and B&M would settle the net differences based on
a referral rate of 5 percent of fees.
f. Jack Robinson and Archie Robertson (both CPAs) are not partners, but they have the
same office, the same employees, and a joint bank account and work together on audits.
A letterhead they use shows both their names and the description “Members, AICPA.”
g. CPA Lou Dewey retired from the two-person firm of Dewey & Cheatham (D&C). One
year later, D&C merged practices with Howe & Company to form a regional firm under
the name of Dewey, Cheatham, & Howe Company

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