Question

For each of the situations listed, identify which of three principles (integrity, objectivity and independence, or due care) from the AICPA Code of Professional Conduct is violated. Assume all persons listed in the situations are members of the AICPA (Note: Refer to the AICPA Code of Professional Conduct) Select the principle from the AICPA Code of Professional Conduct that is violated for each of the situations a. Drew purposely excludes a large amount of accrued salaries payable from this years financial statements so his company's debt-to-equity ratio appears lower to investors. b. Abbey's company determines year-end bonuses based on revenue growth. Abbey records the sales of gift cards during this month as revenue rather than as unearned revenue. None of these gift cards have been used by customers as of the end of the current month. By recording the gift card sales as revenue in the current period, revenue will be higher and Abbey's bonus will, as a result, be higher as well. manager at the payroll company John does not attend training on the new revenue recognition standard because he is busy dealing with the accounting impact of a merger c. Debbie, a CPA, is an associate at a regional public accounting firm. Debbie's firm is auditing a local payroll company. Debbie does not disclose that her husband is a d. A new revenue recognition standard has been issued by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB)

Answer 1

Answer: The answer is a

Step-by-step explanation:

fundamental accounting concepts and conventions are the basic rules and regulation s which are observed in keeping accounting records to make such records fair and objective. Accounting concept are the basic rules that guide the preparation of periodic financial statement of an organization. It includes Going concern concept, Business entity concept, The historical cost concept, Marching concept, periodicity concept, Realization concept, Consistency concept. While accounting convention are the practical principles developed for use in the application of accounting concepts to particular situation and circumstances in order to avoid doubt and conflict. It includes objectivity, Materiality, prudence,fairness, substance over form. However, with reference to the AICPA codes of professional practice which are

Responsibility : These are found in Article I section 52 of their codes of professional practice which states that members must show high sense of responsibility and accountability and must be morally upright in the performance of their professional practice.

Integrity : These are found in Article III section 54 of their codes of professional practice which states that members must show high sense of honesty in the performance of their duties in order to further justify the confidence repose in them by the members of the public.

Objectivity and indepence: These are found in the Article IV section 55 of their codes of professional practice which states that in the preparation of financial statement members must observed the rules that guide the preparation of the financial statement specify by the accounting concepts and their actions and inaction should not be influenced by emotions or personal prejudice and the accounting information should not be prepared under the influence of another person.

Due Care : These are found in Article V section 56 of their codes of professional practice which states that members must strictly adhere to both technical and ethical standards of their profession in the performance of their official duties. Therefore the Drew has violated the principles of objectivity and independence , and integrity in the performance of his professional duties.