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ET Section 591
- Ethics Rulings on Other Responsibilities and Practices |
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[1.] Retention
of Records
[Superseded by interpretation 501-1.]
2. Fees:
Collection of Notes Issued in
Payment
Question—A
member's firm made arrangements with a bank to collect notes issued by a client in payment of fees due, and so advised the delinquent client. Is this procedure ethical?
Answer—The
procedure followed does not violate any provision of the Code.
3. Employment
by Non-CPA Firm
Question—A
member is considering employment with a public accounting firm made up of one or more non-CPA practitioners. If he is employed by such a firm, what are his responsibilities under the Rules of Conduct?
Answer—A
member so employed must comply with all the Rules of Conduct. If he becomes a partner in such a firm, he will then in addition be held responsible for compliance with the Rules of Conduct by all persons associated with him.
[4.] Association
Employee
[5.] Association
as an Agent
[6.] Associations,
Speaking Engagements
[8.] Change
of Control of Client Company
[9.] Charity
Solicitation by Phone
[12.] Confirmation
Requests
[13.] Confirmation
Stickers
[16.] Letter
on Behalf of Client
[17.] Letterhead
for Estate Practice
[18.] Letterhead
for Promotional Material
[19.] Mailings
to Accountants
[20.] Trade
Association Analysis
[21.] Trade
Association Survey
[22.] Management
Consultant
[23.] Tax
Work Obtained Through Bookkeeper
[24.] Advertising
on Tax Broadcast
[25.] Alumni
Magazine Announcement
[26.] Brochure
Showing Use of Equipment
[27.] Client
Publishing Article on Member's
Software Program
[28.] Business
Card on Newsletter
[30.] Charitable
Contribution
[31.] Congratulatory
Message
[32.] Copyright
for Wheel Computer and
Tax Withholding Tables
Question—What
responsibility does a member have for the information included in advertising material used to promote a course which he has been asked to conduct?
Answer—It
is of value to prospective students to know the instructor's background—such as degrees he holds, professional society affiliations, and the name of his firm. The member has the responsibility to ascertain that all promotional efforts are within the bounds of rule 502 [ET section 502.01].
[34.] Course
Promotional Circular
[36.] CPA-Author
of Book Review
[37.] CPA-Authored
Articles
38. CPA
Title, Controller of Bank
Question—A
member not in public practice is controller of a bank. May the member permit the bank to use his CPA title on bank stationery and in paid advertisements listing the officers and directors of the bank?
Answer—The
use of the CPA title on bank stationery by a member not in public practice is proper. It would also be proper for the CPA title of the member to appear in paid advertisements of the bank that list the officers and directors.
[39.] CPA
Title Imprinted on Checks
[40.] CPA
Title in Campaign for School
Board Membership
[41.] CPA
Title in Lecture Ad
[42.] CPA
Title in Political Endorsement
[43.] CPA
Designation in Speaker's Qualifications
[44.] CPA
Designation of Speaker Named
in Tax Forum Ad
[45.] CPA
Title on Agency Letterhead
[46.] CPA
Title on Employment Agency Letterhead
[47.] Low-Income
Taxpayers
[48.] CPA
Title on Public Official's Match
Folder
[49.] CPA
Designation on Research Reports
[50.] Data
Processing Program Ad in Technical
Publications
[51.] Directories
in Elevator
[52.] Directory,
Alphabetical
[53.] Directory,
Chamber of Commerce Buyer's
Guide
[54.] Directory,
Trade Association
[55.] Directory
Listing, Bank Auditors
[56.] Directory
Listing, Change in Telephone
Number Announcements
[57.] Directory
Listing, Fraternity
[58.] Directory
Listing, "Lawyer-CPA-Tax
Attorney"
[59.] Directory
Listing, Membership Designation
[60.] Directory
Listing, Multiple
[62.] Directory
Listing, Partners' Names
[63.] Directory
Listing, White Pages
[Superseded February 1976]
[64.] Directory,
Trade Association
[65.] Distribution
of Firm Bulletin to
Publisher
[66.] Distribution
of Firm Literature
[67.] Firm
Publications: Annual Financial
Report
[68.] Employment
Ads: "Situations Wanted"
[69.] Firm
Name in Staff Training Manual
[70.] CPA
Title on License Plates
[71.] Firm
Name on Bowling Shirts
[72.] Firm
Name on Desk Calendars
[73.] Firm
Name on EDP Publication
[74.] Firm
Name on Tax Booklet
[75.] Greeting
Cards to Clients
[77.] Letterhead:
Academic Degrees
78. Letterhead:
Lawyer-CPA
Question—May
a member who is also admitted to the Bar represent himself on his letterhead as both an attorney and a CPA, or should he use separate letterheads in the conduct of the two practices?
Answer—The
Code does not prohibit the simultaneous practice of accounting and law by a member licensed in both professions. Either a single or separate letterheads may be used, provided the information with respect to the CPA designation complies with rule 502 [ET section 502.01].
However, the member should also consult the rules of the applicable Bar Association.
[79.] Letterhead:
Tax Specialization
[83.] Nonpractitioner
in Sales Brochure
[84.] Paid
for by Others, Member's Testimonial
Letter
[85.] Paid
for by Others, Member's Testimonial
Letter
[86.] Paid
for by Others, Name in Client
Ad
[87.] Paid
for by Others, Radio Program
Dedication
[88.] Political
Endorsement
[89.] Postage
Meter Machines
[91.] Press
Release on Change in Staff
[92.] Press
Release on Change in Staff
[93.] Press
Release on Society Chapter
Meeting
[94.] Professorship
Named After CPA
[95.] Qualifications
as Attachment to Report
[96.] Resume
for Lender's Information
[97.] Seminar
Announcement
[98.] Signs
on Office Premises
[99.] Signs
on Office Premises
[100.] Specialization
on Business Card
[101.] Specialization,
Acquisitions &
Mergers
[102.] Specialization:
"Tax Accountant"
Designation by Nonpractitioner
[103.] Recruiting
Ad in Employment Guide
or Career Opportunity Guide
[104.] Staff
Recruiting in University Publication
[105.] Announcement
Card: Elected to Vice
Presidency
[106.] Information
Under Telephone Directory
Heading
[107.] Member
as Consultant for Client's
Customers
108. Member
Interviewed by the Press
Question—What
ethical standards should a member observe when he is interviewed by the press?
Answer—When
interviewed by a writer or reporter, the member should observe the limitations imposed on him by the Rules of Conduct. The member may not provide the press with any information for publication that he could not publish himself.
[109.] Compensation
From Nonpractitioners
[110.] Computer
Service Franchise
[111.] Purchase
of Bookkeeping Practice
[113.] Member's
Spouse as Insurance Agent
[114.] Member's
Firm Paying Employee Bonuses
117. Consumer
Credit Company Director
Question—A
consumer credit company purchases installment sales contracts from retailers and receives payments from consumers. May a practicing CPA serve as a director or officer of such a corporation?
Answer—Yes,
as long as he does not audit the corporation and does not participate in matters which might involve a conflict of interest.
[121.] Insurance
Salesman
[122.] Investment
Advisor
[124.] Mutual
Fund Salesman
[125.] Private
Investor in Business and
Real Estate
[126.] Real
Estate Broker
[128.] State
Secretary of Revenue
[131.] Bookkeeping
Service as Feeder
[132.] Tax
Practice: Conflict of Interest
[133.] Member
Employed by Incorporated
Law Firm
134. Association
of Accountants Not Partners
Question—Two
members who are not partners share an office, have the same employees, have a joint bank account, and work together on each other's engagements. Would it be proper to have a joint letterhead showing both names, "Certified Public Accountants," and their addresses?
Answer—In
these circumstances the public would assume that a partnership existed. If any reports were to be issued under the joint heading, rule 505 [ET section 505.01]
would be violated.
Members should not use a letterhead showing the names of two accountants when a partnership does not exist.
135. Association
of Firms Not Partners
Question—Three
CPA firms wish to form an association—not a partnership—to be known as "Smith, Jones & Associates." Is there any impropriety in this?
Answer—The
use of such a title is not permitted since it might mislead the public into thinking a true partnership exists. Instead, each firm is advised to use its own name on its letterhead, indicating the other two as correspondents.
136. Audit
with Former Partner
Question—A
member's firm consisting of one certified and one noncertified partner has been dissolved. One account was retained which the two practitioners plan to continue to service together. Should the audit report be submitted on partnership stationery?
Answer—It
would appear proper for the audit to be carried out jointly by the two former partners. The opinion should be presented on plain paper and signed somewhat as follows:
John Doe, Certified Public Accountant
Richard Roe, Accountant
Such a signature would leave no doubt as to whether a partnership existed, and the client and others would have the assurance that both accountants participated in the audit.
137. Nonproprietary
Partners
Question—A
member's firm wishes to institute the designation "nonproprietary partner" to describe certain high-ranking staff who were former partners of merged firms who did not qualify for partnership in the merging firm. With this title, they would be eligible to participate in the firm's pension plan. In holding themselves out to the public they would be required to use this designation. Is there any impropriety in the proposed title?
Answer—The
use of the designation "partner" should be restricted to those members of the firm who are legally partners. Those who are not parties to the partnership agreement should not hold themselves out in any manner which might lead others to believe that they are partners. The use of the designation "nonproprietary partner" by one who is not in fact a partner is considered misleading and therefore is not permitted.
138. Partner
Having Separate Proprietorship
Question—May
a member be a partner of a firm of public accountants, all other members of which are noncertified, and at the same time retain for himself a practice of his own as a CPA?
Answer—Rule
505 [ET section 505.01]
would not prohibit such a practice. However, clients and others interested should be advised about the dual position of the member to prevent any misunderstanding or misrepresentation.
[139.] Partnership
with Non-CPA
Question—A
member's firm, consisting of four members, practices under the name of the managing partner who is presently seeking election to high public office. If he is elected and withdraws from the partnership, may the three remaining partners continue to use the present firm name?
Answer—It
would not be a violation for the three remaining partners to continue to practice under the name of the managing partner followed by the designation "and Company."
141. Responsibility
for Non-CPA Partner
Question—Is
a member who has formed a partnership with a noncertified public accountant ethically responsible for all the acts of the partnership?
Answer—Yes.
If the noncertified partner should violate the Code, the member would be held accountable.
[143.] Partnership
With Non-CPA
144. Title:
Partnership Roster
Question—Is
there any prohibition in the Code to the use of an established firm name in a different state where there is some difference in the roster of partners?
Answer—It
would be proper for the firm to use the established name in different states even though the roster of partners differed as long as the firm otherwise complies with rule 505 [ET section 505.01].
145. Firm
Name of Merged Partnerships
Question—When
two partnerships merge, is it permissible for the newly merged firm to practice under a title which includes the name of a partner who had retired from one of the two firms prior to the merger?
Answer—Rule
505 [ET section 505.01]
of the Code of Professional Conduct states that partnerships may practice under a firm title which includes the name or names of former partners. Since the retired partner was once a partner in one of the merged firms, it would be proper for his name to appear in the title of a newly created firm.
[146.] Membership
Designation
[149.] Data
Processing: Accounting and
Bookkeeping Assistance
[150.] Data
Processing: Billing Service
[151.] Data
Processing: Computer Center
[152.] Data
Processing: Computer Center
[153.] Data
Processing: Computer Center
[154.] Data
Processing: Computer Center,
Service Bureau as Client
[155.] Data
Processing: Computer Corporation
[156.] Data
Processing: Consultant to Service
Bureaus
[157.] Data
Processing: Employee Not in
Practice
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