Arnold Ambitious has recently completed a difficult Financial Statement audit for a nonpublic audit client. Ingrid Influence, the CFO, is thrilled with Arnold’s work and tells him that she will recommend his firm to other corporate leaders. Ingrid is so impressed with Arnold’s abilities, she asks him to prepare a complex feasibility analysis regarding an international acquisition. (This engagement would be an attestation engagement performed under AICPA's Attestation standards, which require the practitioner CPA be competent in performing a particular engagement.) Eager to advance his career, Arnold accepts the special project even though he knows he is unqualified. Arnold plans to learn on the job.
Later that week, Arnold’s supervisor expresses both surprise and pleasure that Arnold has the expertise to prepare the analysis and has taken the initiative to accept additional work from the client. As Arnold begins to research the tasks involved, it becomes clear that he lacks the necessary expertise to complete the analysis competently. Arnold’s supervisor has told other partners that Ingrid is planning to refer new clients to the firm because of Arnold’s initiative.
Arnold has been receiving regular calls from both Ingrid and his supervisor inquiring about his progress. Recently, Arnold’s supervisor told him that Arnold is on the short list for a promotion. Arnold thinks he might be able perform a substandard job with no one being the wiser, since no one else at the firm has the expertise to review his work.
Arnold sits in his office helplessly going through Ingrid’s documents and is completely at a loss.
Who are the stakeholders in Arnold's decision? Identify at least three.
What are the primary alternatives Arnold has in dealing with the situation? (Identify at least three.)
Do any of the alternatives violate the AICPA Code of Professional Conduct? If so, which rule and explain why?
What should Arnold do and why?