Question

A violation of the profession's ethical standards is least likely to occur when a CPA

A. Purchases another CPA's accounting practices and bases the price on a percentage of the fees accruing from clients over the three-year period.
B. Receives a percentage of the amounts invested by the CPA's audit clients in a tax shelter with the clients' knowledge and approval.
C. Has a public accounting practice and also is president and sole stockholder of a corporation that engages in data processing services for the public. The CPA often refers his attest entities to the data processing company.
D. Forms an association - not a legally binding partnership - with two other sole practitioners and calls the association ""Adams, Betts & Associates.

Answer 1

A CPA purchasing another's accounting practice based on future fees is least likely to violate ethical standards compared to receiving commissions from audit clients or referring attest entities to own businesses, which present clear conflicts of interest.

Step-by-step explanation:

A violation of the profession’s ethical standards is least likely to occur when a CPA purchases another CPA's accounting practices and bases the price on a percentage of the fees accruing from clients over a three-year period. This is because the transaction is based on future earnings and does not involve a direct conflict of interest or commission-based on referrals. The scenarios presented in options B and C are more likely to be ethical violations due to direct conflicts of interest and the potential for auditors to be influenced by their financial investments. Forming an association as described in option D is not inherently unethical unless the association misleads clients or the public.