each of following situations involves a possible violation o

1 London School of Business & Finance Each of the following situations involves a possible violation of the Independence Rule of the AICPA\'s Code of Conduct Required: Indicate whether each situation violates the Code. If it violates the Code, explain why. Willam, a sole practitioner, has provided extensive advisory services for his audit entity, Leather analyses, counseled on potential expansion plans, and counseled on banking relationships but has not made any management decisions. Ltd. He has interpreted financial statements, provided torecasts and other Leather is a privately held entity.- × viKl at e Brown, CPA, has been asked by his audit entity, Stainless Plumbing Supply to help implement new control system, Brown will arrange inter ews for Stainless\'s hiring of new personnel and instruct and oversoe the training of current entily personnel. Stainless Plumbing is a privatoly heid company. Stainless will make all hiring decisions and auah et G&G; boutique, iarge manufacturer of recently won the n\'s clothing. Christior had ntial investment in G&G; prior to bidding on the engagement In anticipation of winning the engagement, Christior placed his shares of G&G; stock in a blind trust (d) Goh & Associates audits a condominium association in which the parents of a member of the firm own a unit and reside. The unit is material to the parents\' net worth, and the member participates in the engagement. issued fieldwork planning for the audit of the next year\'s June 30 financial statements. riod ua S M, a sole practitioner, audited Collin Inc.\'s financial statements for the year ended June 30 and was stock by the entity as payment of the audit fee. Chua disposed of the stock before commencing t Corporation requires an audit for the current year. However, ICI has not paid E&Y; The fees due tax-related services performed 2 years ago. ICl issued E&Y; a note for the unpaid fees and E&Y; proceed with the audif services Legal respons.b.kty

Solution

(a). According to AICPA\'s Code of Professional Conduct, Rule 101, the auditor is allowed to provide advisory services. Independence would not be considered impaired because the member\'s role is advisory in nature and the client is privately held entity.

(b). According to AICPA\'s Code of Professional Conduct, Rule 101, the case is not violate this rule as Stainless plumbing will make all hiring decisions and supervise emploees once they are trained. Besides, Bobby Brown must have a limited role. For instance, Brown must not act or perform any type of supervisory position.

(c). Under the AICPA\'s Code of Professional Conduct, Rule 101, the case is violate this ruling as Christior had a substantial investment in G&G prior to bidding on the engagement.

(d). According to AICPA\'s Code of Professional Conduct, Rule 101, the case is violate this ruling because the parents of a member of the firm own a unit and reside and the unit is material to the parent\'s net worth. The situation is violated the application of the independence rules to a covered members immediate family.

(e). According to AICPA\'s Code of Professional Conduct, Rule 101, the case does violate this ruling because Chua had a financial interest in the client. Independence is impaired if a member has a direct financial interest in a client during the period of the professional engagement or at the time of expressing an opinion.

(f). According to AICPA\'s Code of Professional Conduct, Rule 101, the case does violate this ruling because ICI issued E&Y a note for the unpaid fees. Independence is impaired as the note is a prohibited loan from the member to the client.