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

question 24

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) Johnny Line has a successful dentistry practice in Calgary. Johnny has recommended one of his patients to Leslie King, public accountant. To show gratitude for the referral, Leslie has agreed to pay Johnny 5% of the fee for audit services rendered by Leslie to Johnny's patient. Leslie discloses the payment agreement to her new client.
Violation? Yes No

• A) Johnny Line has a successful dentistry practice in Calgary. Johnny has recommended one of his patients to Leslie King, public accountant. To show gratitude for the referral, Leslie has agreed to pay Johnny 5% of the fee for audit services rendered by Leslie to Johnny's patient. Leslie discloses the payment agreement to her new client.
• Violation? Yes No

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Definitions:

Market Value

Today's market rate for the purchase or sale of services or assets.

Flotation Cost

Costs a company faces when it issues new securities, encompassing fees for underwriting, legal services, registration, and printing.

WACC

A measurement called the Weighted Average Cost of Capital assesses the cost of a business's capital, where every capital category is assigned a proportional weight.

Capital Structure

The particular combination of debt and equity that a company uses to finance its overall operations and growth.