Respond to the following:
a. Chris Armas, CPA, is a partner responsible for the audit engagement of Mario Manufacturing. Chris has a dependent daughter who is employed by Mario Manufacturing as a machine operator – a non-financial and non-audit-sensitive position.
Is this a violation of the AICPA Code of Conduct? Explain.
b. Paul Brent, CPA, is a partner in the CPA firm that audits Keystone, Inc., a closely held corporation. Brent’s sister is the chief financial officer of Keystone, Inc. The CPA firm has only one office, so Paul Brent and the partner responsible for the audit work in close contact on a regular basis.
Is this a violation of the AICPA Code of Conduct? Explain.
c. The accounting firm of Jenne & Jenne, CPAs is negotiating a fee with a new audit client. They agree the client will pay $75,000 if Jenne & Jenne issues a clean unqualified opinion and $50,000 if any type of an opinion other than a clean opinion is issued.
Is this a violation of the AICPA Code of Conduct? Explain.
d. Don O’Kroy, CPA is a member of the engagement team that performs the audit of Torok Corporation. Don’s five-year-old daughter, Precious, received ten shares of Torok Corporation’s common stock for her fifth birthday. The stock was a gift from Precious’s grandmother – Don’s wife’s mother.
Is this a violation of the AICPA Code of Conduct? Explain.