Each of the Following Situations Involves a Possible Violation of the Provincial

question 5

Essay

Each of the following situations involves a possible violation of the provincial institutes' Rules of Professional Conduct.For each situation (1)decide whether or not the rules have been violated,and (2)briefly explain how the situation violates (or does not violate)the rules.A)Carla is the CFO of Xenon Company.Carla was very happy after her husband Dwayne,a partner at a large PA firm,was assigned as the new auditor of the company.Carla is confident that this will be helpful to Xenon since Dwayne already knows so much about the business.
Violation? Yes No
Explanation:
B)Jeremy accepted a summer internship at a PA firm.Jeremy's parents own 0.1% of Raven Inc,a large public company in Austria.Raven Inc.is a client of the Austrian branch of the PA firm.Jeremy reported this to the partner of his office.
Violation? Yes No
Explanation:
C)Ken Burns is a partner at Burns and Fields LLP,a PA firm.Ken was approached by a friend who asked him to invest in Safran Group Inc. ,a growing high tech company.The proposal would be for Ken to invest $650 000 to obtain 1% of the company.Ken decided to go ahead with the investment because Safran is a client from their Seattle office and he has never provided any services to Safran Inc.Ken indicates that he will ensure that he does not work on the audit of Safran.
Violation? Yes No
Explanation:
D)Sintron Inc.is a payroll processing company.Over the past 5 years,Clarkson Coppers LLP,a PA firm,has outsourced its payroll processing and other human resources tasks to Sintron.Clarkson Coopers LLP is happy to outsource more functions to Sintron as Sintron has asked Clarkson for additional consulting services with regards to system implementation and application of new accounting policies.
Violation? Yes No

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Definitions:

Inventory Turnover

A ratio showing how many times a company has sold and replaced inventory over a given period.

Inventory Balance

The total value of all the goods and materials held by a company as stock, intended for sale or production.

COGS Formulation

COGS formulation involves calculating the direct costs attributable to the production of the goods sold by a company, including materials and labor.

Cash Collections

The process of gathering and managing the cash payments received from customers or clients.