Connect Access Card for Principles of Auditing & Other Assurance Services
21st Edition
ISBN: 9781260299366
Author: Ray Whittington, Kurt Pany
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 3, Problem 48P
a.
To determine
Explain whether firm B would impair independence or not.
b.
To determine
Explain whether firm B would impair independence or not.
c.
To determine
Explain whether firm B would impair independence or not.
d.
To determine
Explain whether firm B would impair independence or not.
e.
To determine
Explain whether firm B would impair independence or not.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Create a hypothetical ethics case then describe the guidance that applies to the issue. The simplest was to complete this assignment is to use any ethical dilemma that you may have encountered in professional practice or review the AICPA Code of Conduct or the IRS Circular 230 then inventing an ethical situation based on one of these sources. Also, you can use news stories, any disciplinary actions on state CPA websites. After you describe the situation in a case format, then search and locate the ethics guidance that addresses the issue.
Use this format:
1. What inspired this case idea?
2. Describe the situation in case format
3. Outline the applicable guidance and how it should be applied to this issue
Each of the following situations involves possible violations ofthe AICPA Code of Professional Conduct. For each situation, state whether it is a violationof the Code. In those cases in which it is a violation, explain the nature of the violationand the rationale for the existing rule.a. The audit firm of Miller and Yancy, CPAs, has joined an association of other CPAfirms across the country to enhance the types of professional services the firm canprovide. Miller and Yancy share resources with other firms in the association,including audit methodologies, audit manuals, and common IT systems for billingand time reporting. One of the partners in Miller and Yancy has a direct financialinterest in the audit client of another firm in the association.b. Bruce Sullivan, CPA, is the audit partner on the engagement of Xylium Corporation,which is a public company. In structuring the agreement with the audit committeefor the audit of Xylium’s financial statements, Sullivan included a clause that…
Roger Royce, CPA, has encountered a situation that he thinks may pose a threat to his independence with respect to Watson, Incorporated an audit client. The situation is not addressed by an independence rule or regulation. Using the AICPA Conceptual Framework for Independence Standards, describe how Royce can determine whether the threat truly impairs his independence.
Chapter 3 Solutions
Connect Access Card for Principles of Auditing & Other Assurance Services
Ch. 3 - What is meant by the term ethical dilemma?...Ch. 3 - What are the two major types of constraints on...Ch. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Bill Scott works as a manager in the Phoenix...Ch. 3 - Prob. 9RQCh. 3 - Prob. 10RQ
Ch. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Prob. 14RQCh. 3 - Prob. 15RQCh. 3 - Prob. 16RQCh. 3 - Prob. 17RQCh. 3 - Prob. 18RQCh. 3 - Prob. 19RQCh. 3 - Prob. 20RQCh. 3 - Prob. 21RQCh. 3 - Prob. 22RQCh. 3 - Prob. 23RQCh. 3 - Prob. 24RQCh. 3 - Prob. 25RQCh. 3 - Prob. 26RQCh. 3 - Prob. 27QRACh. 3 - Prob. 28QRACh. 3 - Prob. 29QRACh. 3 - Prob. 30QRACh. 3 - Prob. 31QRACh. 3 - Prob. 32QRACh. 3 - Ron Barber, CPA, is auditing the financial...Ch. 3 - Prob. 34AOQCh. 3 - Prob. 34BOQCh. 3 - Prob. 34COQCh. 3 - Prob. 34DOQCh. 3 - Prob. 34EOQCh. 3 - Prob. 34FOQCh. 3 - Prob. 34GOQCh. 3 - Prob. 34HOQCh. 3 - Prob. 34IOQCh. 3 - Prob. 34JOQCh. 3 - Prob. 34KOQCh. 3 - Prob. 34LOQCh. 3 - Prob. 35OQCh. 3 - Prob. 36OQCh. 3 - Prob. 37OQCh. 3 - Prob. 38OQCh. 3 - Prob. 39OQCh. 3 - Prob. 40OQCh. 3 - Prob. 41OQCh. 3 - Prob. 42OQCh. 3 - Gary Watson, a graduating business student at a...Ch. 3 - Prob. 44PCh. 3 - Prob. 45PCh. 3 - Prob. 46PCh. 3 - Prob. 47PCh. 3 - Prob. 48PCh. 3 - Prob. 49ITCCh. 3 - Prob. 50ITCCh. 3 - Prob. 51RDC
Knowledge Booster
Similar questions
- Which of the following is not a step in the outline for examining ethical issues? Establish the facts of the situation. Evaluate each course of action. Make a decision. Confirm decision with FASB.arrow_forwardWhat are the important points that can be learned from the the code of professional ethics. What are the most recent ACFE Code of Professional Ethics, discuss in one or two sentences after each Code of Professional Ethics statement below and the meaning of the statement in simple words CODE OF PROFESSIONAL ETHICS An ACFE Member shall, at all times, demonstrate a commitment to professionalism and diligence in the performance of their duties. An ACFE Member shall not engage in any illegal or unethical conduct, or any activity which would constitute a conflict of interest that has not been properly disclosed to the appropriate parties. An ACFE Member shall, at all times, exhibit the highest level of integrity in the performance of all professional assignments, and will accept only assignments for which there is reasonable expectation that the assignment will be completed with professional competence. An ACFE Member will comply with the lawful orders of the courts, and will testify to…arrow_forwardDetermine at least two AICPA professional conduct principles most likely to be violated. Provide your supporting rationale.arrow_forward
- 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’…arrow_forwardCPAs become involved in a variety of types of engagements. For each of the following statements, indicate whether it relates to an examination (E), review (R), or agreed-upon procedures (A) engagement. If the statement does not relate to examinations, reviews, or agreed-upon procedures, select None. a. the cpa need not be independent to perform this service b. the term"We are not aware of any material modifications that should be made" is often included in the report c. the report issued provides "limited assurance" d. the procedures involved are generally limited to inquiry and analytical procedures. e. this type of engagement provides more assurance than a reviewarrow_forwardAICPA independence requirements suggest that a CPA should evaluate whether a particular threat to independence would lead a reasonable person, aware of all the relevant facts, to conclude that: a A questioning mind reveals doubt as to independence. b An unacceptable risk of non-independence exists. c The accountant is definitely not independent. d There is substantial cause for a legal finding of non-independence.arrow_forward
- Select one of the following principles of professional conduct to examine in the AICPA Code of Professional Conduct document: Responsibilities Public interest Integrity Objectivity and independence Due care Scope and nature of services 1-How would you define and describe your selected principle in your own words? 2-What value does the principle bring to practitioners, businesses, and clients? 3-What is an example of a difficult situation that a practitioner may face related to your selected principle, and what would an ethical response to the situation be? Why might a practitioner be tempted to, or accidentally, not take an ethical course of action?arrow_forwardFor each of the situations listed, identify which of three principles (integrity, objectivity and independence, or due care) from the AICPA Code of Professional Conduct is violated. Assume allpersons listed in the situations are members of the AICPA. (Note: Refer to the AICPA Code ofProfessional Conduct contained on pages 25–27 in Chapter 1 for descriptions of the principles.)a. Reggie, the managing partner of an audit firm, has the authority to approve all transactions. As a result, he uses firm funds to purchase a new couch for his home.b. Taylor is a first-year auditor for a large public accounting firm. She is assigned to auditBike Global, a regional travel agency specializing in bike tours. Taylor does not discloseto her firm that her mother is a co-owner of Bike Global, since Taylor knows that shewill not allow herself to be influenced by her mom.c. Rick has been working for his company for ten years and is required to attend internal control training annually. Rick does not…arrow_forwardAICPA Code of Professional Conduct. Reread the Module B introduction about ScottLondon, CPA.Required:a. What code violations have occurred in this case?b. What is the range of penalties that the PCAOB could levy against London? By the California State Board of Accountancy?c. What do you think is the appropriate penalty?arrow_forward
- (a) You recently attended a lecture where it was stated that “professionals all over the world should be alive to their duties and not breach the ethics of their profession”. This statement was an affirmation of what you know that public interest and ethical standards should not be compromised by professionals in the discharge of their duties. Required: a. What is Professional ethics? b. Briefly discuss the importance of professional ethics c. Highlight the differences between rule based and principle-based professional ethics d. Discuss the inherent weaknesses of rule-based professional ethics e. Discuss the advantages of principle-based professional ethics.arrow_forwardWhich of the following is considered a type of threat to compliance with the Rules of the Code of Professional Conduct? A. Self interest B. Illegitimate skepticism C. Lack of management participation D. Irrevocabilityarrow_forwardUnder the AICPA Code of Professional Conduct, which of the following rules is not applicable to CPAs in business? A. Integrity and objectivity B. General standards C. Independence D. Acts discreditablearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Business/Professional Ethics Directors/Executives...AccountingISBN:9781337485913Author:BROOKSPublisher:CengagePrinciples of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
- Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage LearningAuditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Business/Professional Ethics Directors/Executives...
Accounting
ISBN:9781337485913
Author:BROOKS
Publisher:Cengage
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub