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CPA and controller

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https://www.studypool.com/discuss/1002835/i-need-help-answering-these-auditing-
questions
[Title of your Assignment]
Your name
Your Instructor’s name
Course #
Your Institution’s name
Date:

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1) Each of the following situations involves a possible violation by a member in industry of
the AICPA's Code of Professional Conduct. For each situation, indicate whether it violates
the Code. If it violates the Code, indicate which rule is violated and explain why.
a) You are a CPA and controller of ABC, Inc. ABC's' external auditors have asked you
to sign the management representation letter. You signed the management
representation letter, even though you know that full disclosures have not been made
to ABC's external auditors.
Answer: Yes. Signing such a letter would be a known misrepresentation of fact in violation
of Rule 102.
b) You were hired by XYZ, inc. to supervise its accounting department in preparing
financial statements and presenting them to senior management. Due to considerable
time incurred on other financial activities, you were unable to supervise the
accounting staff adequately. It is later discovered that XYZ's financial statements
contain false and misleading information.
Answer: Yes. Under Interpretation 501-4, a member who, through his or her negligence,
makes or permits another to make false and misleading entries in the financial statements
has committed an act discreditable to the profession.
c) You are a sole CPA practitioner in private practice and you have provided extensive
advisory services for your audit client, HIJ, Inc. You have help management
interpret their financial statements, provided forecasts and other analyses, counseled
on potential expansion plans, and counseled on banking relationships. HIJ is a
publicly traded firm subject to SEC regulation.
Answer: A sole CPA practitioner should comply with the regulations of Rule 201 while
providing his advisory services to HIJ, Inc. Here, a sole CPA practitioner is deemed to be
HIJ’s most trusted client. So, if he doesn’t observe integrity, professional responsibilities,
due care, objectivity & independence, in the best public interest on the behalf of publicly
traded firm i.e. HIJ, Inc. he could be violated Rule 201.

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https://www.studypool.com/discuss/1002835/i-need-help-answering-these-auditing-questions [Title of your Assignment] Your name Your Instructor’s name Course # Your Institution’s name Date: 1) Each of the following situations involves a possible violation by a member in industry of the AICPA's Code of Professional Conduct. For each situation, indicate whether it violates the Code. If it violates the Code, indicate which rule is violated and explain why. a) You are a CPA and controller of ABC, Inc. ABC's' external auditors have asked you to sign the management representation letter. You signed the management representation letter, even though you know that full disclosures have not been made to ABC's external auditors. Answer: Yes.  Signing such a letter would be a known misrepresentation of fact in violation of Rule 102. b) You were hired by XYZ, inc. to supervise its accounting department in preparing financial statements and presenting them to senior management. Due to considerable time incurred on other financial activities, you were unable to supervise the accounting staff adequately. It is later discovered that XYZ's financial statements contain f ...
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