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To eliminate this problem, John Smith could firstly discuss the issue with the professionals involved and request ideas for the firm's new title. He could also use the previous title as a guideline, as this would provide both a starting point for the new era, as well as the idea that the previous owner and the staff that remains are honored for their contributions to date. According to Rule 505-3 of the AICPA Code of Ethics, it appears that the exact title of the firm is not as important as maintaining practices that are within the public interest. It is both in the firm's and the public interest to remain as close as possible to the previous name, while at the same time indicating that it is now under new management.
NO. 7 the CPA can avoid possible disciplinary action for treating the product recall as an extraordinary item by communicating both with his or her employers and professional entities. If it is determined that such a step is necessary, then the standards have been adhered to and no problems should result, as indicated by ET Section 91.02.1.
NO. 8 There is no reason why the CPA should not familiarize him- or herself with the government audit requirements. Indeed, such additional research is often a requirement of accounting work, regardless of whether or not the normal auditing standards have been followed. This is indicated by Rule 201-1 in Section 201.02 of the AICPA Code of Ethics, which concerns "Competence."
NO. 9 the CPA appears to be searching for excuses...
Doing this could result in legal problems for both the professional and the MDs for whom services are provided. Rule 502-5 under Section.06 of the AICPA Code of Ethics expressly prohibits such use of third parties to disregard the accepted Code of Ethics.
NO. 10 While this is a rather difficult issue, it is addressed by the AICPA Code of Ethics. AICPA recognizes that cases may arise in which accepted accounting principles may limit rather than disclose the accuracy of financial statements. It is however important that the professional discuss this with his or her firm and/or an ethics association in order to obtain a final decision on the issue. The problem is addressed by the AICPA Code of Ethics under ET section 202 and 203.
NO. 11 This is also a difficult issue, as it relates to a conflict of interest between the public and Galaxy. Rule 301-3 prohibits the CPA from disclosing confidential information about Galaxy, although it is in his or her clients' interest to do so. It is suggested that Galaxy be requested to disclose the information themselves. If they refuse, channels such as legal or ethical services should be engaged to serve the public interest. Galaxy should at all times be aware of the steps the CPA is taking to ensure the best interest of the public and the clients involved, and they should have ample time to rectify the situation.
Sources
The American Institute of Public Accountants. (2008,…
Sources
The American Institute of Public Accountants. (2008, 23 Feb). http://www.aicpa.org
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