Each of the following situations involves a possible violation by a member in industry of the...
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Each of the following situations involves a possible violation by a member in industry of the AICPA's Code of Professional Conduct. For each situation, indicate whether it violates the Code. If it violates the Code, indicate which rule is violated and explain why. If you don't think it violations a rule, explain why as well. a) Mitch Rider is the partner-in-charge of the audit of ABC, Inc. Over the years, he has become a golfing buddy of ABC's CEO, Shelly Rhoades. During the current year Rider and Rhoades jointly purchased an exclusive vacation home in North Carolina. The vacation home represents more than 10 percent of Rider's personal wealth. b) c) d) You are auditing a firm that you have audited for years. However, the auditee has yet to pay their full fee from last year's audit and you have turned the matter over to a collection agency. During the audit of a client, you found that the manager on the job had not reviewed a staff accountant's verification of the auditee's inventory balance at year-end. The client was a manufacturing firm and inventory represented 30% of their assets. During the audit of client, you found out that the manager on the job, who you had recently hired from a major competitor on the auditee, had secretly shared details the auditee's pricing strategies with his former employer. Each of the following situations involves a possible violation by a member in industry of the AICPA's Code of Professional Conduct. For each situation, indicate whether it violates the Code. If it violates the Code, indicate which rule is violated and explain why. If you don't think it violations a rule, explain why as well. a) Mitch Rider is the partner-in-charge of the audit of ABC, Inc. Over the years, he has become a golfing buddy of ABC's CEO, Shelly Rhoades. During the current year Rider and Rhoades jointly purchased an exclusive vacation home in North Carolina. The vacation home represents more than 10 percent of Rider's personal wealth. b) c) d) You are auditing a firm that you have audited for years. However, the auditee has yet to pay their full fee from last year's audit and you have turned the matter over to a collection agency. During the audit of a client, you found that the manager on the job had not reviewed a staff accountant's verification of the auditee's inventory balance at year-end. The client was a manufacturing firm and inventory represented 30% of their assets. During the audit of client, you found out that the manager on the job, who you had recently hired from a major competitor on the auditee, had secretly shared details the auditee's pricing strategies with his former employer.
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a ANSWER This situation violates Rule 201 General Standards which requires CPAs to exercise professi... View the full answer
Related Book For
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
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