Kim Integra is in process of preparing tax returns for a client and has discover
ID: 2498465 • Letter: K
Question
Kim Integra is in process of preparing tax returns for a client and has discovered irregularities in the client's tax return. When the irregularities were pointed out to the client, the client indicated that he would not correct it. As a CPA, Kim withdraws from the engagement following the code of professional conduct. How should the Kim respond if asked by the successor CPA why the relationship was terminated? Kim Integra is in process of preparing tax returns for a client and has discovered irregularities in the client's tax return. When the irregularities were pointed out to the client, the client indicated that he would not correct it. As a CPA, Kim withdraws from the engagement following the code of professional conduct. How should the Kim respond if asked by the successor CPA why the relationship was terminated?Explanation / Answer
Kim's response should be as per .02 of 1.700.020 Disclosing Information From Previous Engagements
When a member withdraws from an engagement due to, for example, discovery of irregularities in a client’s tax return, if contacted by the successor, the member should suggest that the successor ask the client to permit the member to discuss all matters freely with the successor. The successor is then on notice of some conflict.
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