Assume that the CPA firm of Giants & Jets LLP audits Knickerbocker Systems Inc. The controller of “the Knicks” happens to be a tax expert. During the current tax season, Giants & Jets gets far behind in processing tax returns for wealthy clients. It does not want to approach them and ask permission to file for an extension to the April 15 deadline. One alternative is for the firm to hire the controller as a consultant just for the tax season. Discuss the ethical issues that should be considered by Giants & Jets before deciding whether to hire the controller of a client including possible threats to independence.
Answer to relevant QuestionsThe managing partner of a CPA firm is approached by the CEO of a major client in the firm’s headquarters office in New York City. The CEO can’t use two tickets to the Super Bowl between the Denver Broncos and the New ...The IRS contacted your client as part of an examination of its tax return and proposed that the client owes an extra $100,000. As the client’s tax accountant and a CPA, can you agree to handle the matter for 40 percent of ...1. Briefly discuss the rules for revenue recognition in accounting and how they pertain to this case. Does the proposed handling of the $12 million violate those rules? Be specific.2. Assume Carl Land is a CPA and Helen ...1. What are the dangers of accepting contingent fees from audit clients for performing non-audit services? Assume in such situations the auditor can, in fact, make independent audit decisions regardless of the contingent fee ...The audit report on General Motors for 2008 issued by Deloitte & Touche included the following statement: “The Corporation’s recurring losses from operations, stockholders’ deficit, and inability to generate sufficient ...
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