Question: Knowledge of the rules of conduct interpretations thereof and resolutions

Knowledge of the rules of conduct, interpretations thereof, and resolutions of Council related to general and technical standards will help you respond to the following cases.

For each case, state whether or not the action or situation shows violation of the ICAO rules of professional conduct, explain why, and cite the relevant rule or interpretation.
a. P. Stebbins, PA, helped Price Corporation prepare a cash flow forecast of hospital operations. The forecast was presented by Stebbins at a city council hearing for approval under the city’s health services ordinance. Stebbins’s report, which accompanied the forecast, consisted entirely of a full description of the sources of information used and the major assumptions made but did not include a disclaimer on the achievability of the forecast.
b. Kim Philby of Philby & Burgess, PAs, received a telephone call from his friend John, who is financial vice-president of U.K. Auto Parts. U.K. distributes parts over a wide area and does about $40 million of business a year. U.K. is not a client but is audited by Anderson, Olds & Watershed PAs, a venerable firm in the city. Kim has been hoping that John would switch auditors. Today, John wants to get Kim’s opinion about accounting for lease capitalizations related to a particularly complicated agreement with franchise dealers. Kim makes notes and promises to call John tomorrow.
c.PA Maclean gave a standard unqualified audit report on the financial statements of Anglo Korp. The annual report document did not contain supplementary oil and gas reserve information required by the CICA Handbook.
d. Saul Panzer is a former university football player. Saul is a PA who works for Aggregate Corporation, which owns controlling interests in 42 other corporations. Theodolinda Bonner, president of Aggregate, has assigned Saul the task of performing audits of these corporations and submitting audit opinions directly to her for later presentation to the board of directors.
e.PA Blunt audits the Huber Hope Company. Huber’s controller, also a PA, has conducted his own audit of Little Hope, Inc., Huber’s single subsidiary, which amounts to 10% of the total assets, revenue, and income of the consolidated entity. Blunt has written an audit report that carefully explains reliance on “part of examination made by other independent auditors,” with added language to explain the controller’s role.

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  • CreatedJanuary 09, 2015
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