Harris Fell, CPA and member of the AICPA, was engaged to audit the financial sta

Question

Harris Fell, CPA and member of the AICPA, was engaged to audit the financial statements of Wilson Corporation. Fell had half-completed the audit when he had a dispute with the management of Wilson Corporation and was discharged. Hal Compton, CPA, was promptly engaged to replace Fell. Wilson Corporation did not compensate Fell for his work to date, therefore, Fell refused to allow Wilson Corporation's management to examine his working papers. Some of the working papers consisted of adjusting journal entries and supporting analysis. Wilson Corporation's management had no other source for this information. Did Fell violate the AICPA Code of Professional Conduct? Explain fully.

Explanation / Answer

In my opinion Harris Fell violated the AICPA code of Professional Conduct thus was dismissed and replaced rather quickly with Hal Compton because of the disagreement with management. Harris Fell half-completed the audit when Wilson Corporation discharged Fell over a managerial dispute. He had not received in compensation for the work he had performed before he was discharged. As according to the Rule 501 the working official papers consisting of adjusting journal entries and supporting analysis must be returned to the client, including all other supporting records that are although not reflected in the books and accounting records. But these are denied if there is an incompletion or fees are due for preparing those records. As the audit was still in progress and not completed he need not have to return them, and in the current scenario he was not paid for his work provides him another reason for them not to be returned. If Wilson pays Fell for the performed work, then he could gain access to his paperwork and can hand over to Compton

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