For Each Situation (1-5),identify the Most Applicable AICPA Rule of Conduct

question 27

Short Answer

For each situation (1-5),identify the most applicable AICPA rule of conduct and whether there is a violation or no violation of the rule (A-F).One or more letters may not be used.
A. Rule 101: Independence; no violation
B. Rule 101: Independence; violation
C. Rule 301: Confidential Client Information; no violation
D. Rule 301: Confidential Client Information; violation
E. Rule 302: Contingent Fees; no violation
F. Rule 302: Contingent Fees; violation
___ 1. Jackson, CPA, and one of his audit clients are considering investing in a business together. Jackson would own 25% of the business and the client would own 50%. Jackson's investment in the business is material to his net worth.
___ 2. Feller, CPA, is the corporate controller for Robert Corporation. Feller believes his employer may have committed an illegal act. After discussing the matter with his attorney, Feller decides to disclose the matter to the appropriate authorities.
___ 3. Brock, CPA, is an owner in the firm Louis and Brock, CPAs. Brock's husband is on the board of directors of Midland Corporation, an audit client of Louis and Brock. Brock does not participate on the audit engagement.
___ 4. Ruth, CPA, owns a building and leases a portion of the space to an audit client. The income from the lease is not material to Ruth.
___ 5. Maris, CPA, performs investment advisory services for an audit client and receives an annual fee based on a percentage of the value of the client's investment portfolio at the end of each year.

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Definitions:

Axon

A long, slender projection of a neuron that typically conducts electrical impulses away from the neuron's cell body.

Neuromuscular Junction

Synapse between a neuron and a muscle cell.

Impulse

A sudden, involuntary urge to perform an action or a quick transmission of electrical signals along a nerve pathway.