explain the nature of the violation and the rationale for the existing rule.

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Auditing P 4-22 Each of the following situations involves possible
violations of the AICPA’s Code of Professional Conduct. For each
situation, state whether it is a violation of the Code. In those cases
in which it is violation, explain the nature of the violation and the
rationale for the existing rule.
a. Pickens and Perkins, CPAs,
are incorporated to practice public accounting. The only shareholders in
the corporation are existing employees of the organization, including
partners, staff members who are CPAs, staff members who are not CPAs,
and administrative personnel.
b. Fenn and Company, CPAs, has a
sophisticated network-based computer server that supports the firm’s
technology systems and databases. Because of excess capacity available
on the server, Fenn and company agreed to maintain on its server
accounting records for one of Fenn’s nonpublic audit clients, Delta
Equipment Company.
c. Godette, CPA has a law practice. Godette has
recommended one of his clients to Doyle, CPA. Doyle has agreed to pay
Godette 10% fo the fee for services rendered by Doyle to Godette’s
client.
d. Theresa Barnes, CPA, has an audit client, Smith, Inc.,
that uses another CPA for management services work. Barnes sends her
firm’s literature covering its management services capabilities to Smith
on a monthly basis, unsolicited.
e. A bank issued a notice to its
depositors that it was being audited and requested them to comply with
the CPA’s effort to obtain a confirmation on the deposit balances. The
bank printed the name and address of the COA int he notice. The COA has
knowledge of the notice.
f. Myron Jones, CPA, is a member of national
CPA firm. His business card includes his name, the firm’s name,
address, and telephone number, and the title IT consultant.
g.
Gutowski, a practicing CPA, has written an article about international
accounting standards that is being published in a professional
publication. The information which Gutowski has approved, includes his
academic degrees, other articles he has had published in professional
journals, and a statement that he is an expert on international
accounting standards.
h. Ralph Williams is the partner on the audit
of a nonprofit charitable organization. He is also a member of the board
of directors, but this position is honorary and does not involve
performing a management function.
i. Poust, CPA, as sold his public
accounting practice, which includes bookkeeping, tax services, and
auditing, to Lyons, CPA. Poust obtained permission from all audit
clients for audit-related working papers before making them available to
Lyons. He did not get permission before releasing tax- and management
services-related working papers.
j. Murphy and Company, CPA’s is the
principal auditor of the consolidated financial statements of Lowe, Inc.
and subsidiaries. Lowe accounts for approximately 98% of consolidated
assets and consolidated net income. The two subsidiaries because he
deems this necessary to warrant the expression of an opinion.

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