The following situations involve a possible violation of the AICPA’s Code of Professional Conduct. For each situation, (1) determine the applicable rule number from the Code, (2) decide whether or not the Code has been violated, and (3) briefly explain how the situation violates (or does not violate) the Code.Howard Cunningham & Co., designates its firm as “Members of the American Institute of Certified Public Accountants.” All of the partners of the firm are CPAs. However, one of the partners has recently chosen to allow her membership to lapse because of personal reasonsRule#_________________ Violation? Yes NoExplanation: Brad Heist, CPA, was travelling from Dallas to Huston, Texas, when he was pulled over by a police officer on suspicion of driving under the influence. The breath-alyzer and a subsequent blood test revealed that Brad was definitely impaired. He was convicted in court of driving while under the influence of alcohol (DUI). This was Brad’s fourth conviction of DUI in less than a year, a felony under Texas law. Accordingly, Brad was sentenced to 18 months in prisonRule#_________________ Violation? Yes NoExplanation: Kelly Brent, CPA, is a partner in the CPA firm that’s audits Dane, Inc., a closely held corporation. Kelly’s sister husband is the chief financial officer in Dane, Inc.Rule#_________________ Violation? Yes NoExplanation: Sarah Martin, CPA, is a senior auditor in the San Francisco office of Coopers & Snoopers, CPAs. Sarah’s father is employed as the controller of Line Electronics, a large publicly held company in Michigan. Line Electronics is one of Coopers & Snoopers’ audit client. Neither Sarah nor the San Francisco office od Coopers & Snoopers is involved in the audit of Line Electronics.Rule#_________________ Violation? Yes NoExplanation: On August 20, 2003, Barbie Anderson, CPA and partner, was offered and accepted the engagement to audit the annual financial statements of Jungmann Corporation for the fiscal year and calendar years ended December 31, 1999, until January 15, 2003, and ended on March 7, 2004. Jungmann Corporation is regulated by the SEC. Barbie served as controller of Jungmann Corporation November5, 1999, until January 10, 2003, at which time she terminated her employment with Jungmann. Barbie owned a material amount of Jungmann Corporation’s common stock from November5, 1999, until August 15, 2003, at which time she sold the stockRule#_________________ Violation? Yes NoExplanation:

unless all the partners are CPA

Answered: The following situations involve a…

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter4: Professional Liability, Auditor Judgment Frameworks, And Professional Responsibilities

Section: Chapter Questions

Problem 64RSCQ

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The following situations involve a possible violation of the AICPA’s Code of Professional Conduct. For each situation, (1) determine the applicable rule number from the Code, (2) decide whether or not the Code has been violated, and (3) briefly explain how the situation violates (or does not violate) the Code.

Howard Cunningham & Co., designates its firm as “Members of the American Institute of Certified Public Accountants.” All of the partners of the firm are CPAs. However, one of the partners has recently chosen to allow her membership to lapse because of personal reasons