PROBLEMS ON ETHICS - Ch 4 ETHICS 1. a. Violation. A...

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Ch 4 ETHICS 1. a. Violation. A partner's independence is impaired when he or she has a close relative employed by a client in a position of significant influence such as chief financial officer. b. No violation. In this situation, there would be no violation of Rule #101 as long as the partner does not participate in the audit. c. Violation. This is a prohibited joint investment with a client. d. No violation. Spouses or dependents who are employed by a client in non-audit-sensitive positions and positions with no significant influence do not impair the CPA's independence. e. Violation. CPAs are prohibited from having a direct financial interest in a client. 2. a. Violation of Rule #505. An owner surviving the death or withdrawal of all other owners may continue to practice under a name which includes the name of past owners for up to two years after becoming a sole practitioner. Lemmerman has been violating Rule 505 since 1994. b. No violation of Rule #503. A CPA may pay a referral fee to a non-CPA as long as the payment is disclosed to the client. c. Violation of Rule #302. This is a contingent fee agreement and is prohibited by Rule 302. d. Violation of Rule #101. Participants in an audit are prohibited from having a direct financial interest in the client. The rule also applies to the participant's dependents.
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This note was uploaded on 08/27/2011 for the course ACCT 310 taught by Professor Verduzco during the Spring '10 term at University of Texas at Austin.

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PROBLEMS ON ETHICS - Ch 4 ETHICS 1. a. Violation. A...

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