Question 2 (12 marks) You have recently joined a Public Accounting firm as an audit trainee. In the first week with the firm you attended a training course. One of the sessions was on the importance of complying with the rules of professional conduct. The instructor presented the three hypothetical scenarios shown below: Required For each scenario discuss the acts by the Public Accountant (PA) and the PA friend that were in violation of the Rules of Professional Conduct. Explain why you think the acts were a violation. Scenario 1 (4 marks) During lunchtime a Public Accountant (PA) informed his friend that he was excited over a new audit client his firm had obtained. The PA told his friend that the new audit client was a men's wear designer clothing company which was in its development stages and that it was going to issue an initial public share offering within the next few weeks, just prior to the latest marketing surveys becoming public. The PA suggested to his friend to buy some shares as they will probably increase in price once the surveys become public knowledge. One of the surveys indicated that there were a number of retailers who had agreed to buy a significant amount of clothing, which should really get the company up and running. The PA also told his friend that he thought the designer clothing company's previous auditors should be \"kicked out\" of the Canadian Institute of Chartered Accountants. The PA said that the previous auditor had allowed the president to run all his personal expenses through the company and bury them in the expense accounts. Scenario 2 ( 4 marks) A controller of an electronics company received a phone call from one of his PA friends. The friend indicated that he has just started up his own practice and was wondering whether he could set up a meeting with the controller to make a bid for the audit of the electronic company at a set fee of \\( \\$ 2,000 \\) and to arrange to pay the controller, secretly, for the client referral. The friend also mentioned that his firm performs \"high quality audits.\