For each of the situations? listed, identify which of three principles? (integri
ID: 2437692 • Letter: F
Question
For each of the situations? listed, identify which of three principles? (integrity, objectivity and?independence, or due? care) from the AICPA Code of Professional Conduct is violated. Assume all persons listed in the situations are members of the AICPA.? (Note: Refer to the AICPA Code of Professional? Conduct.)
Tiffany is the senior accounting manager for Kiva Co. and is in charge of preparing quarterly reports for the CEO and CFO. These reports compare a variety of? Kiva's financial ratios to industry averages. This? quarter, Kiva has done poorly compared to its? competitors, so some of its ratios were not favorable. Because of their legendary? tempers, Tiffany does not want to upset the CEO and CFO. She decides to include only favorable ratios in her report.
Jackie is an accountant for? Widget, Inc., and is stressed by the amount of work her boss has been giving her.?Yesterday, Jackie's boss asked that she perform a financial statement analysis on the? company's previous five years of financial statements and write a report explaining any inconsistencies. Jackie is? busy, so she quickly throws together the? report, without double checking the data used and the related calculations.
Amirali was recently hired as a senior audit manager at the firm of Moeini? & Chaghervand, but did not disclose that his wife is the CFO for one of its clients.
Miles is the accounting manager for Genesis Global and knows the company must maintain working capital in excess of? $50,000 to stay in accordance with its debt covenants. This past? year, Genesis's working capital fell below? $50,000 for a short period of time. Miles created fictitious entries to hide the violation of its debt covenants.
Miles is the accounting manager for Genesis Global and knows the company must maintain working capital in excess of? $50,000 to stay in accordance with its debt covenants. This past? year, Genesis's working capital fell below? $50,000 for a short period of time. Miles created fictitious entries to hide the violation of its debt covenants.
Explanation / Answer
1 In the first case, Tiffany has not followed the principles of Objectivity that is she has sown only favourable ratios which are not free from conflicts 2 In the second case, Jackie has not followed the principle of due care and has just prepared the data 3 In the third case, Amirali has not followed the principle of Independence 4 In the fourth case,Miles has not followed the principle of Integrity and shown fictitous entries
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