You are a member of the ethics committee of your state society. You are reviewing the work of Mr. Quest, a CPA who practices in your state. In recent years numerous complaints have been made against him by other CPAs in the same locality. During the course of your investi- gations, you learn the following about Mr. Quest.

a. Mr. Quest started his business by soliciting interviews with clients of other CPAs in the same city. During the course of the interviews, he indicated that he could perform the same services as his competitors at a lower fee and with the same quality. He was factual about his own background and qualifications and had no intention of subsequently in- creasing the fee.

b. Using legitimate means, Mr. Quest managed to learn how much his competitors were charging for audit fees and consistently bid a lower price. He was successful in obtaining some of the audits.

c. During the audits Mr. Quest continued to keep the books and prepare the financial state- ments of the new clients. In many cases the owners had never kept books or prepared financial statements and had little understanding of them.

d. Mr. Quest recommended that the controllers of some new audit clients be discharged and replaced by people whom he knew and considered to be better qualified.

e. Mr. Quest learned that some of his new audit clients had not filed tax returns for several years. He took this information to the board of directors.

f. Mr. Quest paid referral fees to obtain some of his audit clients. g. Mr. Quest's tax fees were based on the amount of reduction in tax liability he could obtain for his clients; that is, he charged a larger fee if he reduced the taxes of his clients below what he believed the amount would have been if another CPA had prepared the tax return. h. Mr. Quest advertised all of his audit, tax, and management consulting services specialties in the local newspaper. i. The name of Mr. Quest's firm is "Quest for the Best, CPA." Required:

a. Write a report indicating which of these actions you consider to be acceptable and which ones you consider to be violations of the AICPA Code of Professional Conduct.

b. Without regard to the code of professional conduct, write a narrative indicating which actions you consider to be acceptable and unacceptable.