Indicate whether each of the following circumstances is a violation of the Code of Professional Conduct. Explain briefly why you selected your answer.

a. The dependent child of a partner in a CPA firm owns five shares of stock in one of the partner’s audit clients.

b. A CPA embezzles cash from his employer.

c. A CPA advertises in a local news publication.

d. A CPA and the CFO of an audit client both have a material joint investment in another company.

e. A CPA takes a deduction on a client’s tax return that they believe is not justified, because the client requested that they do so.

f. A CPA discloses information about a client in a court of law because the information was subpoenaed.

g. A CPA charges an audit fee that depends on the amount of financing the client obtains.

h. A CPA does not follow generally accepted auditing standards in the audit of a nonpublic US company.

i. A CPA accepts a fee for referring a tax client to a local insurance agent. The CPA discloses the fee arrangement to their client.

j. A CPA prepares financial statements for a client on the cash basis. The accompanying accountant’s report does not disclose the accounting framework applied in preparing the statements.

Answer rating: 100% (QA)

a The situation mentioned here could be professional misconduct if the value of the shares owned is ... View the full answer