Problem
A. Assume that your CPA firm is considering advertising to increase its client base and would like to promote itself as being able to generate the lowest tax liability and/or highest return in the region. Provide the specific code reference that answers whether this approach complies with the code of ethics.
B. Your CPA firm has been auditing the financial statements of XYZ Company for several years. Your assistants have approached you and asked if they can omit the confirmation of XYZ's accounts receivable. Identify the paragraph from the standards that will describe the circumstances nder which the confirmation of accounts receivable may be omitted.
C. As a CPA who is now working in an accounting role at a manufacturer, you have been pressured by your supervisor to make journal entries that you believe would be misleading. After discussing the issue with the supervisor and management one level above them, the issue has still not been resolved in a satisfactory manner. You remember that your auditing professor discussed subordination of judgment a few years ago, but you do not remember the specifics and are under pressure to make decisions. Provide the specific paragraph from the code of ethics that addresses safeguards that you might consider which will reduce threats to code compliance to an acceptable level.
D. Your audit supervisor has asked that you write a brief memorandum to the elatively inexperienced members of the audit team describing the substantive approach to be taken in the upcoming audit. Which section of the professional standards addresses this issue and identifies substantive procedures related to the financial reporting process which must be included?
E. AICPA Professional Standards address matters that the auditor should communicate with those charged with governance (for example, an audit entity's audit committee). Select the specific paragraph of the applicable Statement on Auditing Standards that discusses the form of the auditor's communication with those charged with governance when communicating significant findings from the audit.