that the insurance company was unaware of the existing lien on the building, Gilbert had Bradley notify the insurance company of the fact that Grandtime ' s building was pledged as collateral for a term note.
Shortly after the events described above, Gilbert was charged with several violations of professional ethics.
Required:
Identify and discuss at least four ethical implications of those acts by Gilbert that were in violation of the AICPA Code of Professional Conduct.
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Jensen, Inc., filed suit against a public accounting firm, alleging that the auditors ' negligence was responsible for failure to disclose a large defalcation that had been in process for several years. The public accounting firm responded that it may have been negligent, but that Jensen, Inc., was really to blame because it had completely ignored the public accounting firm ' s repeated recommendations for improvements in internal control.
Required:
If the public accounting firm was negligent, is it responsible for the loss sustained by the client? Does the failure by Jensen, Inc., to follow the auditors ' recommendation for better internal control have any bearing on the question of liability? Explain.
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