Question

Sympatico Accountants engages ABC Tax Preparers to prepare routine tax returns during thebusy season. Under the American Institute of Certified Public Accountants Code, what shouldSympatico do prior to sharing its clients’ information with ABC.

a.Inform its tax clients that the firm may be using an outside service when providing professionalservices.
b.List a notice in the local newspaper that the firm may be using an outside service when providingprofessional services.
c.Ask clients to sign a waiver limiting Sympatico’s liability in the event ABC makes errors inSympatico’s tax returns.
d.Sympatico would not be required to take any particular action in this situation.

Answer 1

A

Step-by-step explanation:

Ethically, Sympatico accountants should inform first its tax clients that they will going to hire a third party tax preparers during the busy season. That is for them to be aware that other party (ABC tax preparers) will know their tax information and they have the right to decide whether to allow it to happen or not. This is to maintain trust and confidentiality, that plays a vital role in an accountant-client relationship.