For each of the situations listed, identify which of three principles (integrity, objectivity and independence, or due care) from the AICPA Code of Professional Conduct is violated. Assume all persons listed in the situations are members of the AICPA. (Note: Refer to the AICPA Code of Professional Conduct contained on pages 25–27 in Chapter 1 for descriptions of the principles.)

a. Dominick is an audit manager at a local auditing firm. The firm wants to outsource its payroll function. Dominick strongly urges his firm to select the ABC Payroll Company, but does not disclose that his son is a co-owner of the company.

b. Currently, NorthernWay Airlines uses the straight-line method of depreciation to depreciate its airplanes. Julie’s boss would like to see if switching to the units-of-production method would be a tax savings strategy for the company. Julie does not remember how to calculate depreciation using the units-of-production method, so she makes up numbers to show her boss based on what she thinks might be right.

c. In order to increase the tax benefits to her company, Tamika categorizes the survey fees and grading and clearing expenditures associated with getting a plot of land ready for building as land improvements instead of including those expenditures in the cost of the land.

d. Samuel is aware that his company will receive tax benefits for recording depreciation expense. He depreciates a new asset using the double-declining-balance method in the first year. In the second year, he switches to the units-of production method, but does not account for the depreciation he already expensed last year. As a result, the company will recognize a higher amount of depreciation expense on its tax return in the second year than if Samuel had done the depreciation calculation correctly.