ACCT 642 Week 1 Discussion | Liberty University | Assignment Help
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- 15 May 2021
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- Accounting & Economics Assignment Help / Accounting basics
ACCT 642 Week 1 Discussion | Liberty University | Assignment Help
Accounting Ethics Dilemmas (Forum 5)
NO. 1
A CPA has been engaged by a client to perform an audit
in accordance with generally accepted auditing standards. The CPA has also been
asked by the client to recruit and hire a chief accounting officer for a new branch
location.
NO. 2
A CPA has a client who owes the CPA’s firm $15,000 for
accounting services performed approximately eighteen months ago. At the
conclusion of the current audit, the CPA is considering issuing the client an
unqualified opinion inasmuch as the CPA has conducted the audit in accordance
with generally accepted auditing standards.
NO. 3
A CPA is designing a block advertisement for the local
newspaper to announce the creation of his new practice. In the advertisement he
is considering identifying himself as a “specialist” in estate tax affairs and
an “expert” in providing accounting services to small business.
NO. 4
A CPA has been asked by a client to evaluate various
commercial service bureaus and recommend a particular service bureau for
processing the client’s accounting records. Several partners in the CPA’s firm
have a material interest in one of the service bureaus under consideration.
NO. 5
A CPA, a staff member, plans to submit her resume to
another firm. In her resume, as an indication of her auditing experience, she
is considering listing the names of several non-public companies for which she
has performed audits.
NO. 6
A CPA, a sole practitioner, has acquired a practice
from a retiring CPA. The CPA plans to retain the professional staff, which
includes 5 CPAs. The CPA is considering identifying the new firm as “John
Smith, CPA and Associates.”
NO. 7
Hamilton Company underwent a major product recall.
This recall was primarily responsible for the company showing a significant
loss on its income statement for the current year. The company has had product
recalls before, but management believes the cost of the recall should be
treated as an extraordinary item because of its magnitude. The CPA in charge of
the audit concurs with management’s treatment concerning the product recall.
NO. 8
A CPA has been selected as auditor for a federally
subsidized housing complex. The engagement contract required that such audits
be in compliance with government audit standards as well as generally accepted
auditing standards. The CPA is unfamiliar with the particular government audit
requirements but conducts an otherwise satisfactory audit, in accordance with
generally accepted auditing standards, and is considering issuing an unqualified
report.
NO. 9
A CPA is considering organizing a corporation to
provide billing services for local MDs. The corporation would be in a separate
office. The CPA claims that this type of service does not constitute the
practice of public accounting and therefore its operations are not bound by the
institute’s professional ethics.
NO. 10
Freon Company has decided to deviate from a generally
accepted accounting principle (GAAP) in publishing their financial statements
because Freon believes that the statements would be misleading, if they
followed GAAP. The CPA concurs in this departure from GAAP. In his report, the
CPA is considering disclosing the following information in a middle paragraph:
the deviation and the approximate effects thereof. Based upon these
disclosures, the CPA thinks that an unqualified opinion would be appropriate.
NO. 11
A CPA’s client, Galaxy, performs payroll service for
approximately forty companies including twelve of the CPA’s clients. The
payroll services performed by Galaxy include all of the standard payroll
operations along with payment, i.e. for each payroll period. Galaxy receives
funds from each company to deposit in a special imprest bank account to cover
the payroll checks issued to their employees. During the current audit of
Galaxy, the CPA discovers that Galaxy’s liabilities exceed its assets by
approximately $50,000. After discussing the problem with Galaxy, the CPA is
considering notifying its clients who use Galaxy’s services to stop sending
funds to Galaxy lest the cash disappear or become frozen due to legal or
financial complications.
Group Discussion Board Grading Rubric
100 Points