A3 Twatt - Chapter 3 Tiffany Watt Assignment: A3 September...

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Chapter 3 Tiffany Watt Assignment: A3 September 21, 2011 AC 405 – E01 3-30. For the following situations indicate whether a rule of the AICPA Code of Conduct applies; if yes, state which rule, whether the rule has been violated, and why or why not. (a) This situation violates Rule 101, Independence. It is an independence violation because the mortgage amount is material to Walker. Therefore, he has a direct financial interest in the company. (b) This situation violates letter A, Professional Competence, under Rule 201. It states that only those professional services that the member or the member’s firm can reasonably expect to be completed with professional competence should be undertake. If Logan has never audited a modeling agency before, then there is no way that we can be sure that the audit will be completed with professional competence. (c) This situation violates Rule 502, Advertising and Other Forms of Solicitation, because the CPA firm is attempting to obtain clients by advertising under false pretenses. (d) This situation is not a violation because, according to Rule 301, Confidential Client Information, this prohibition shall not restrict members’ exchange of information in connection with the investigative or disciplinary proceedings described in #4 of this rule or the professional practice reviews described in #3. (e)
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A3 Twatt - Chapter 3 Tiffany Watt Assignment: A3 September...

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