Question

Sam Burke, CPA, finds a material error in his client's previously filed tax return and advises the client on how to correct it. Under AICPA rules, what should Sam do if the client does not agree to correct the error? a) Offer a reduced fee to the client to correct the return. b) Amend and file the return without the client's knowledge. c) Consider his continued association with the client. d) Disclose the matter to the IRS.

Answer 1

Answer:

The answer is: C) Consider his continued association with the client.

Explanation:

The American Institute of Certified Public Accountants (AICPA) issues a professional conduct code that regulates their affiliates' activities. According to AICPA's Responsibilities and Public Interest principles, Sam should not continue to work with this client. Sam cannot maintain a professional conduct if he accepts that his client doesn't correct his prior mistakes. If those prior errors persist, then his job will be negatively affected and then it will his responsibility. Accounting is not something static that begins and ends in one period, past records affect present and future records.