ACC575-p1 Module B & C HW.docx - Joseph Schipani ACC 575 Homework Module B C B-51 A Rules 301 201 and 202 Retaining an outside mail service to

ACC575-p1 Module B & C HW.docx - Joseph Schipani ACC...

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Joseph Schipani ACC 575 Homework Module B & C B-51 A) Rules 301, 201, and 202 Retaining an outside mail service to handle confirmation of accounts receivable for the CPA is not acceptable practice. The conformation of receivables is an important part of the audit and therefore cannot be delegated to a non-accountant, unsupervised by the CPA. Such an arraignment would violate rule 202 concerning the observance pf Generally Accepted Auditing Standards, especially the General standards and the standards of Field Work. In addition, the use of outside mailing service for this work would be a violation of Rule 301 concerning the confidentiality of information obtained from the client’s records. The public accounting firm would be making available to outsiders a list of the client’s customers and their outstanding balances. The CPA would probably would also be in violation of Rule 201, general standards part B and C. B) Rule 301 The CPA has apparently violated the rule of confidentiality. The CPA should seek the client’s permission to disclose information to anyone, including a successor auditor. The banker should ask the client for permission to speak to the CPA, and refusal itself should raise questions and concerns to the banker. C) Rule 301 A protective purchaser may review the client’s files before purchasing the practice, but the client’s permission must be obtained to turn them over to the new owner.
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