Eric is a tax manager for a national CPA firm that audits Penny- Pinching Bank (PPB). Eric and his staff prepare and review the tax return for PPB. One day, at an alumni football tailgate party, he meets another alumnus who Eric discovers is on the Audit Committee of PPB. The Audit Committee member/ alumnus was unaware that Eric’s CPA firm is doing PPC’s tax return.
a. What would you recommend Eric do at this point?
b. What potential ethical and practice issues do you see in this situation?