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Unformatted text preview: 3-16a. Likely not a violation. Ownership by staff members (other than partners) not involved in the audit is acceptable. However, many firms have their own rules on independence that frequently are more stringent than those of the professional bodies.b.Violation. Phyllis Allen is associating herself with information that she believes is false or at least questionable. She should not have completed the return.c.Violation. Tanabe is implying by accepting the engagement, that she has the necessary competence; the client does not know that the computer consultant is not a member of Tanabe's firm or that Tanabe does not have the competence to review the consultant's work. As well, Tanabe is not maintaining the reputation of the profession, she is not performing with integrity nor is she keeping herself informed of developments in functions in which she is relied upon because of her profession.In addition, Tanabe must obtain from the consultant a written agreement that he will preserve the confidentiality of any information provided by the client to the consultant, should such an engagement be accepted.d.Violation. The client should have been notified that the review was to take place, and an attempt made to obtain the client's permission for such review because the review was not a part of a professional practice review program. The firms violated the rule by not obtaining consent from the client for the review. If they want to do this regularly, they should place a clause in their engagement letter whereby consent is given “in the event that this client is selected for working paper review.”e.No violation. Since it is a criminal offence, the only obligation is to report the conviction to the professional association of which the accountant is a member if the conviction affects Thorty’s work with financial matters. This would likely not be the case, however, it could affect the reputation of the profession. If the criminal offence were related to fraud or financial matters, then Thorty could be subject to prosecution by his professional organization....
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This note was uploaded on 02/19/2012 for the course ACCT Audit taught by Professor Niki during the Spring '12 term at Saint Mary's University Texas.
- Spring '12