You are having lunch with a former employee of your firm, a friend of yours. Gino...

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You are having lunch with a former employee of your firm, a friend of yours. Gino had been laid off last year when he had failed to pass his professional examinations for the third year in a row. Gino told you that he managed to obtain a qualified accounting designation and public accounting licence this year, and has started his public practice. He has been circulating flyers and electronic email announcements with fixed rates: $400 for a compilation engagement, $1,000 for a review, and $5,000 for an audit where revenues are less than $1 million, $15,000 for an audit for a client with revenues up to $5 million. He already has clients to keep him busy for the next three months. He even has some feelers for clients that he personally handled while he was working for your firm - there were a lot of contacts developed during the five years that he was working there! To help attract some of the larger clients, he is considering not charging any fee for the first ten hours spent on tax-related services. The clients have been coming so fast and furious that he has not bothered sending notices to the previous auditors. Gino sees no sense in looking at the files of the previous year, as this way he can get a fresh look at the client. Given that most small to medium sized business have so few controls, he has been able to provide these low cost audits because he focuses solely on tests of details and analytical review. Gino ended the conversation by asking you if you would like to join him at his new firm, because at this rate he'll need a second person real soon! Required: Identify the violations of professional rules of conduct and explain why they are violations, You are having lunch with a former employee of your firm, a friend of yours. Gino had been laid off last year when he had failed to pass his professional examinations for the third year in a row. Gino told you that he managed to obtain a qualified accounting designation and public accounting licence this year, and has started his public practice. He has been circulating flyers and electronic email announcements with fixed rates: $400 for a compilation engagement, $1,000 for a review, and $5,000 for an audit where revenues are less than $1 million, $15,000 for an audit for a client with revenues up to $5 million. He already has clients to keep him busy for the next three months. He even has some feelers for clients that he personally handled while he was working for your firm - there were a lot of contacts developed during the five years that he was working there! To help attract some of the larger clients, he is considering not charging any fee for the first ten hours spent on tax-related services. The clients have been coming so fast and furious that he has not bothered sending notices to the previous auditors. Gino sees no sense in looking at the files of the previous year, as this way he can get a fresh look at the client. Given that most small to medium sized business have so few controls, he has been able to provide these low cost audits because he focuses solely on tests of details and analytical review. Gino ended the conversation by asking you if you would like to join him at his new firm, because at this rate he'll need a second person real soon! Required: Identify the violations of professional rules of conduct and explain why they are violations,

Answer rating: 100% (QA)

There are several violations of professional rules of conduct that Gino has committed which include ... View the full answer