For the following situation, state whether the CPA has violated the CHARTERED PR

Question

For the following situation, state whether the CPA has violated the CHARTERED PROFESSIONAL ACCOUNTANTS OF ONTARIO Professional Rules of Conduct and/or Independence Standard, and explain your reasoning.

1. Irene, CPA, provides various services for Simply Fashion Inc., a privately held company. She completes all of Simply Fashion Inc.’s tax work, including preparing the annual corporate tax filing and performing tax consulting services. Recently Simply Fashion Inc. began negotiations for a new bank loan, and a condition of the loan is that Simply Fashion must provide the bank with audited financial statements on an annual basis. Simply Fashion has asked Irene to complete the annual audit and to continue to perform the tax services she already performs. Irene accepted the engagement, and in order to improve audit efficiency, she has assigned the team that completes the tax work to the financial statement audit.

Explanation / Answer

Yes Irene CPA has vailated the CHARTERED PROFESSIONAL ACCOUNTANT(CPA) OF ONTARIO Professional Rules of Conduct and/or Independence Standard.

For the purposes of Rules 204.1 to 204.9 and the related Council Interpretations: “accounting role” means a role in which a person is in a position to or does exercise more than minimal influence over: (a) the contents of the client’s accounting records related to the financial statements subject to audit or review by the member or firm; or

(b) anyone who prepares such financial statements.

Since from the above Irene has assigned the team that completes the tax work to the financial statement audit, because she vailated the rules of CPA of perfoming accounting to tax work.

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.