Question

A violation of the AICPA Code of Professional Conduct's ethical standards is least likely to occur when a CPA

A. purchases another CPA's accounting practice and bases the price on a percentage of the fees accruing from the clients over a 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 is the president and sole stockholder of a corporation that engages in data processing services for the public. The CPA often refers his clients 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 violation of AICPA's ethical standards is least likely with a CPA basing the purchase price of a practice on a percentage of future fees. Other options involve clear conflicts of interest or misrepresentation, which are more likely to lead to ethical violations.

Step-by-step explanation:

A violation of the AICPA Code of Professional Conduct's ethical standards is least likely to occur when option A is chosen: a CPA purchases another CPA's accounting practice and bases the price on a percentage of the fees accruing from the clients over a three-year period. This is a commonly accepted practice and does not inherently involve any conflicts of interest or violations of ethical standards. In contrast, option B involves a direct conflict of interest, as the CPA could potentially be influenced to act in their own financial interest rather than those of their audit clients. Option C includes a conflict of interest that can impair objectivity, as the CPA is referring clients to a business they own. Lastly, option D could be misleading and suggest a partnership where none exists, which can violate ethical standards related to misrepresentation.