FREE Trial

In 2004, the Government Accountability Office (GAO) conducted an investigation of tax shelters of 61 Fortune 500 users of tax

Question:

In 2004, the Government Accountability Office (GAO) conducted an investigation of tax shelters of 61 Fortune 500 users of tax shelters provided by accounting firms that were their external auditors covering more than one year between 1998-2003. In each case the company received benefits from the tax shelter: 61 companies had 82 transactions worth about $3.4 billion in estimated potential tax losses generally reportable to the IRS.
What are the potential ethical dangers for an audit firm that provides tax shelters for an audit client? Is it ethically appropriate to do so under the profession’s ethical standards?

This problem has been solved!


Do you need an answer to a question different from the above? Ask your question!

Step by Step Answer:

Answer rating: 42% (7 reviews)

A potential ethic danger for a firm that provides tax shelters for an audit client is the CPA becomes an advocate for the audit client to save taxes T…View the full answer


answer-question
Answered By
tutor-profile-image
JAPHETH KOGEI
Hi there. I'm here to assist you to score the highest marks on your assignments and homework. My areas of specialisation are: Auditing, Financial Accounting, Macroeconomics, Monetary-economics, Business-administration, Advanced-accounting, Corporate Finance, Professional-accounting-ethics, Corporate governance, Financial-risk-analysis, Financial-budgeting, Corporate-social-responsibility, Statistics, Business management, logic, Critical thinking, So, I look forward to helping you solve your academic problem. I enjoy teaching and tutoring university and high school students. During my free time, I also read books on motivation, leadership, comedy, emotional intelligence, critical thinking, nature, human nature, innovation, persuasion, performance, negotiations, goals, power, time management, wealth, debates, sales, and finance. Additionally, I am a panellist on an FM radio program on Sunday mornings where we discuss current affairs. I travel three times a year either to the USA, Europe and around Africa. As a university student in the USA, I enjoyed interacting with people from different cultures and ethnic groups. Together with friends, we travelled widely in the USA and in Europe (UK, France, Denmark, Germany, Turkey, etc). So, I look forward to tutoring you. I believe that it will be exciting to meet them.
3.00+ 2+ Reviews 10+ Question Solved
Related Book For  answer-question
Ethical Obligations and Decision Making in Accounting Text and Cases

Ethical Obligations and Decision Making in Accounting Text and Cases

ISBN: 978-0077862213

3rd edition

Authors: Steven Mintz, Roselyn Morris

See More Books
View Solution
Create a free account to access the answer
Cannot find your solution?
Post a FREE question now and get an answer within minutes. * Average response time.
Question Posted: December 30, 2014 02:33:15
See More Questions

Students also viewed these Organizational Behavior questions

Q:
The Government Accountability Office (GAO) describes expanded- scope governmental auditing to include all of the following except a. Financial statement audits. b. Attestation engagements. c....
A:
c Correct By definition expanded scope govern......
Q:
The Government Accountability Office (GAO) gave the following results in a report based on an examination of 39 failed banks: 9 The early warning system provided by bank call reports* is seriously l...
A:
Corporate governance generally mentions the tools methods and relations by which companies succe......
Q:
Nutritional researchers conducted an investigation of two high-fiber diets intended to reduce serum cholesterol level. Twenty men with high serum cholesterol were randomly allocated to receive an...
A:
H 0 Mean fall in cholesterol is the same on both diets 1 2 H A Mean fal......
Q:
Let S represent the amount of steel produced (in tons). Steel production is related to the amount of labor used (L) and the amount of capital used (C) by the following function: S = 20 L0.30 C 0.70...
A:
a The optimization model is b The......
Q:
What is the port used by SMTP?
A:
A tunnel is an intermediary program that acts as a blind relay between two connectio......
Q:
Suppose that the spot pound in dollars exchange rate is :$ = 1.4570-1.4576 and the six-month forward pound exchange rate is $/ = 1.4408-1.4434. a. Is the pound trading at a discount or at a premium...
A:
The midpoint of the spot dollar to pound exchange rate is......
Q:
B Corporation, a calendar year-end, accrual basis taxpayer, is owned 75 percent by Bonnie, a cash basis taxpayer. On December 31, 2020, the corporation accrues interest of $4,000 on a loan from...
A:
Click to View...
Q:
Woodys Supermarket, a small chain of grocery stores, is building a Web site to allow customers to place orders for groceries and other items they sell. The customer places a Web order, the customer...
A:
The activity diagram is shown below Place Web Order Invalid Data Confirm Order Or......
Q:
1. Compute the predetermined overhead rate for each department.
A:
To compute the predetermined overhead rate for each department we ll use the formula Predetermined Overhead Rate fracTotal Manufacturing Overhead Cost......
Q:
Bombay Fast Food and 2 Bros. Pizza are pizza parlors that are located a few feet away from each other on a street in New York. a. Both firms sell pizza slices at a price of $1 each. Given this price,...
A:
a Both firms sell pizza slices at 1 each The market has a total demand of 10 000 slices provided tha......
Q:
What is the danger from an ethical perspective of having a CPA firm that conducts the audit of a public company also engaged in consulting with the company on the installation of a new financial...
A:
Objectivity is lost when you audit your own work If you think it is a sound system you will not see......
Q:
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 clients tax accountant and a CPA, can you agree to handle the...
A:
Under Rule 302 of the AICPA Code a CPA is prohibited from performing for a contingent fee any professional services for or to receive such a fee from......
Q:
Marijuana is classified under federal law as an illegal drug. On what enumerated power would Congress have relied when it enacted the federal statute that outlaws marijuana and other specified drugs?...
A:
Yes the federal government would be entitled to adopt the aggressive enforcement p......
Q:
Find the domain and range of f(x, y, z)= In[2-2--2]. Describe the domain geometrically, that is, explain what three dimen- sional object the domain represents. (5) b) Find and sketch the domain of...
A:
Click to View...
Q:
With reference to the article "Are audit partners' compensation and audit quality related to their consulting revenue? by by Che, L., Langli, J.C., Svanstrom, T 2021, determine the following: What is...
A:
Based on the article Are audit partners compensation and audit quality related to their consulting revenue by Che L Langli J C and Svanstrom T 2021 here are the answers to your questions 1 Objective P......
Q:
All work must be supported with in-text citations and a minimum of two references for Part 1 and a minimum of 1 reference for each conflict management style in Part 2. You should have at least 5...
A:
Part 1 Ineffective Communication in a Relationship Describe a personal or professional relationship in which communication was stifled In my previous workplace I had a team member with whom communicat......
Q:
Domain Name System (DNS) uses client/server architecture to maintain and distribute hostnames and IP addresses on networks ranging from small local area networks to the Internet. (a) Briefly explain...
A:
a here are the six key concepts of the Domain Name System DNS Domain Names Domain names are human readable labels used to identify resources on the internet They consist of a hierarchical structure wi......
Q:
Conduct research on your current events topic and locate a blog, a newspaper (print or online), and a magazine (print or online) that discuss the topic. What differences do you notice in how each...
A:
I don t have real time access to the internet or the ability to conduct research on current events However I can provide you with a general understanding of how different print mediums may handle the......
Q:
What is accrued interest?
A:
Accrued intere......
Q:
The following information is for Montreal Gloves Inc. for the year 2020: Manufacturing costs Number of gloves manufactured Beginning inventory $ 3,016,700 311,000 pairs 0 pairs Sales in 2020 were...
A:
Answer The cost of goods sold for 2020 Cost of goods sold 3 007 000 Co......
Q:
In his research into the components of ethical decision making, Rest raised the following issue: Assuming someone possesses sound moral reasoning skills, "Why would they ever choose the moral...
A:
James Rest attempted to address some of the problems that are recognized in Kohlberg s work and used a model with three levels of understanding person......
Q:
Evaluate the role of each of the stakeholders in this case from an ethical perspective. How do you assess blame for the Phar-Mor fraud?
A:
This case highlights rationalizations used to justify not meeting one s ethical obligations The rationalization was that all the misrepresentation was short term so that the company could recover loss......
Q:
Assume you are in Stan Cherelstein's position. Evaluate the moral intensity issues in the case. How do these issues relate to Rest's Four-Component Model of Ethical Decision Making? What are the...
A:
Cherelstein s first step and challenge is moral sensitivity and acknowledgement of the fraud He unde......
Public Human Resource Management Problems And Prospects 5th Edition - ISBN: 0136037690 - Free Book