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Unformatted text preview: d suggest that the successor obtain permission from the client to reveal the reasons
A member works for a municipality to verify that proper amounts of taxes have been paid by area businesses. The
member is prohibited from releasing any confidential information obtained in his/her professional capacity.
A member reveals a client’s name without permission. Disclosure violates Rule 301 if the client is in bankruptcy and
the member specializes in bankruptcy cases. Disclosure in this situation constitutes release of confidential
Knowledge and expertise obtained from a prior engagement may be used on behalf of a current client provided that
the details of the other engagement are not revealed without permission. b. Review of a Member’s Practice
1) 2) 2. The rule against disclosure of confidential information does not prohibit the
review of a member’s practice as part of a purchase, sale, or merger of the
However, appropriate precautions (e.g., a written confidentiality agreement)
should be taken so that the prospective buyer does not disclose such
information. Contingent Fees – Rule 302
b. A contingent fee is established as part of an agreement under which the amount of
the fee is dependent upon the finding or result.
Nevertheless, fees are not considered to be contingent if
2) c. They are fixed by public authorities (e.g., courts).
In tax matters, they are based on a) The results of judicial proceedings or
b) The findings of governmental agencies.
A member in public practice shall not perform for a contingent fee any professional
services for any of the following:
2) An audit or review of a financial statement
A compilation of a financial statement if
a) 3) The member might reasonably expect that a third party will use the
b) The report does not disclose the lack of independence
An examination of prospective financial information (a financial forecast or
projection) Copyright © 2012 Gleim Publications, Inc., and/or Gleim Internet, Inc. All rights reserved. Duplication prohibited. www.gleim.com 17 SU 2: Professional Responsibilities d. A member in public practice shall not prepare for a contingent fee
3) An original tax return
An amended tax return
A claim for a tax refund
EXAMPLES q q q q A member’s spouse may provide services to the member’s attest client for a contingent fee provided the spouse’s
activities are separate from the member’s practice and the member is not significantly involved. However, a conflict
of interest issue may arise.
A member who provides investment advisory services for an attest client for a percentage of the investment portfolio
ordinarily violates Rule 302.
Providing investment advisory services to the owners, officers, or employees of an attest client for a contingent fee
does not violate Rule 302. However, the member should consider the possible conflict of interest and also
A contingent fee is allowed for representation of a client (1) in an examination by a revenue agent or (2) who is
obtaining a private letter ruling. A contingent fee is not allowed for the preparation of an amended income tax return
for a client claiming a refund of taxes because of an inadvertent omission of a proper deduction. But a contingent
fee is allowed for filing an amended tax return claiming a refund based on a tax issue that is the subject of a test
case involving a different taxpayer. 2.6 OTHER RESPONSIBILITIES
1. Acts Discreditable – Rule 501
a. A member shall not commit an act that is discreditable to the profession.
q q q
q A firm may arrange with a bank to collect notes issued by a client in payment of fees.
A CPA employed by a firm with one or more non-CPA practitioners must obey the Rules of Conduct. If the CPA
becomes a partner, (s)he is responsible for compliance with the Rules of Conduct by all associated practitioners.
A member not in public practice who is controller of a bank may use the CPA title on bank stationery and in paid
A member who is an attorney and a CPA may use a letterhead with both titles on it.
A member interviewed by the press should observe the Rules of Conduct and not provide information that the
member could not publish. b. Response to Requests for Records
1) Client-provided records and reproductions of such records must be returned
after a client request even if (a) fees have not been paid or (b) the state in
which the member practices grants a lien on certain records.
a) 2) 3) Client-provided records are “accounting or other records belonging to the
client that were provided to the member by or on behalf of the client.”
Working papers are the member’s property and need not be made available to
the client or others unless required by
b) Regulation, or
Client records prepared by the member include accounting and other records
(e.g., tax returns, journals, ledgers, and supporting schedules) that the member
was engaged to prepare.
a) They may be withheld if fees are due or the engagement...
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This note was uploaded on 04/02/2013 for the course ACCT 7100 taught by Professor Swanson during the Spring '13 term at Valdosta State University .
- Spring '13