Auditing Week 2 HW

4-18
a. (1)
b. (3)
c. (1)

4-19
a. (1)
b. (3)
c. (3)

4-20
Service/Violation?
a. Providing bookkeeping services to a public company.
The services were pre-approved by the audit committee of the company.
Yes

b. Providing internal audit services to a public company that is not an audit client.
No

c. Implementing a financial information system designed by management for a private company.
No

d. Recommending a tax shelter to a client that is publicly held. The services were pre-approved by the audit committee. No

e. Providing internal audit services to a public company client with the pre-approval of the audit committee.
Yes

f. Providing bookkeeping services to an audit client that is a private company.
No

4-21
a. Rule 101 - Independence. No violation. If the services performed conform to the requirements of Interpretation 101-3, independence of Emrich would not be considered to be impaired. There would be a violation of SEC rules if the client were publicly held.

b. Rule 101 - Independence. No violation. Franz Marteens is not a partner nor is he assigned to the engagement team for the audit client.

c. Rule 201 - General Standards. Violation. Interpretation 201-1 states that a member who accepts a professional engagement implies that he or she has the necessary competence to complete the engagement according to professional standards. Wilkenson has violated the rule since he does not have the expertise to review the work of the consultant hired by Wilkenson. Wilkenson should have suggested that the company hire the consultant directly.

d. Rule 102 - Integrity and Objectivity. Violation. This rule states that in tax practice, a member may resolve doubt in favor of his or her client as long as there is reasonable support for his or her position.
In the example case, the client