For each of the following, indicate which AICPA principle or rule would be violated, or if none

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Question:

For each of the following, indicate which AICPA principle or rule would be violated, or if none will be violated. Also, identify the specific principle or rule violation (if applicable) and explain the rationale for your answer. Note: Each scenario must be considered separately.

a. The Chief Financial Officer of ABX Corporation immediately resigned from ABX. The resignation was right before the month-end close process. ABX contacted Joe who is a Partner of YAW CPA (External Auditors of ABX) to help oversee the month-end close process for ABX.

b. YAW CPA reviews the computer system controls for ABX Corporation. YAW observed that ABX computer systems were not functioning properly and recommended that ABX purchase new computers. YAW also recommended ABX to purchase the computers from JOVAL. JOVAL has agreed to pay YAW a 5% commission if ABX purchases the computers from JOVAL.

c. ABX Corporation has asked YAW CPA to help ABX find a suitable Chief Financial Officer replacement for their Chief Financial Officer who immediately resigned from ABX.

d. YAW CPA performs various management services for ABX Corporation. ABX signed an additional agreement with YAW for YAW to review its computer system controls.

e. YAW CPA performs various management services for ABX Corporation. ABX signed an additional agreement with YAW for YAW’s Senior Manager to serve on the Board of ABX.

f. ABX Corporation engages YAW CPA to review its inventory management systems. ABX agrees to pay YAW 25% of any savings if the review of the inventory management systems leads to cost savings.

g. YAW CPA could not perform the external audit services for ABX this year since YAW is heavily short staffed. YAW refers ABX to KYC CPA. KYC agrees to conduct the external audit services and pays YAW a $5,000 referral fee.