The following situations involve Shirley Gaas, Bryan Qian, Yu Jiang and Brett Thompson, staff accountants with the
Fantastic news! We've Found the answer you've been seeking!
Question:
The following situations involve Shirley Gaas, Bryan Qian, Yu Jiang and Brett Thompson, staff accountants with the CPA firm of Sumikawa and Zhu.
- Brett Thompson’s acquaintance, Yushan Jiu, is chief loan officer at Easy Loan Bank, an audit client of Sumikawa and Zhu. Brett asks Yushan for an unsecured loan from Easy Loan Bank, so he can buy an engagement ring for his girlfriend and Yushan approves the loan.
- The bookkeeper of Ke Manufacturing Company, a non-public company, resigned two months ago and has not been replaced. As a result, Ke’s transactions have not been recorded and the books are not up to date. To comply with the terms of a loan agreement, Ke needs to prepare interim financial statements, but it cannot do so until the books are posted. Ke needs the help of its independent auditors, Sumikawa & Zhu, and wants to borrow Shirley Gaas to perform the work because she was the senior on last year’s audit.
- Yu Jiang discovered that his client, Cole Company, materially understated its taxable income on last year’s tax return. Yu informed his supervisor about this who then told Cole to prepare an amended return. Cole is unwilling to take corrective measures and Yu informed the Internal Revenue Service.
- Bryan’s older brother James is on the internal audit staff of the Zhao Corporation. Bryan is a staff associate on the audit of Zhao. James is located in another city and the two brothers do not interact during the audit.
Required
For each situation, discuss whether there was or has not been any violation of ethical conduct. Support your answers by reference to the AICPA Code of Professional Conduct.
Related Book For
Accounting Principles
ISBN: 978-0470534793
10th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date: