Question

PART 1: DESCRIBE THE TWO TYPES OF CONFLICTS OF INTEREST A CPA MAY HAVE. GIVE AN EXAMPLE OF EACH. PART 2: ANSWER EACH QUESTION AND GIVE AN EXAMPLE. 1) MAY A CPA WITHHOLD CLIENT-PROVIDED RECORDS? 2) MAY A CPA WITHHOLD CPA-PREPARED RECORDS? 3) MAY A CPA WITHHOLD THEIR WORK PAPERS?

Answer 1

PART 1

ONE TYPE OF CONFLICT OF INTEREST: CPA IS FINANCIALLY INTERSTED IN A BUSINESS IN WHICH CLIENT HAS INVESTED.

EXAMPLE : X a CPA , IN PERSONAL FIONANCIAL PLANNING ENGAGEMENT RECOMMENDS THAT THE CLIENT SHOULD INVEST IN A BUSINESS IN WHICH CPA IS PROMOTER OR HAVING FINANCIAL INTEREST.

ONE TYPE OF CONFLICT OF INTEREST IS THAT CPA HAS A FINANCIAL INTEREST IN A COMPANY THAT IS A MAJOR COMPETITOR OF ANOTHER CLIENT .

EXAMPLE : Y A CPA IS PROVIDING HIS SERVICES (THOSE SERVICES WHICH ARE PROVIDED BY A CPA PROFESSIONAL) TO. AMIR KHAN & CONSTUCTION PVT LTD. , Mr Y IS ALSO FINANCIALY INTERESTED IN SALMAN KHAN & CONSTRUCTION LTD. AND AMIR AND SALMAN ARE MAJOR COMPETITOR TO EACH OTHER SO HERE THE CONFLICT OF INTERST ARISES.

PART 2: 1) NO CLIENT GENERALLY MAY NOT HAVE THE POWERS TO RETAIN CLIENT PROVIDED RECORDS.

FOR EXmple : CLIENT PROVIDES YOU WITH WHAT APPEARS TO BE A COPY OF HIS OR HER FORM1099 YOU SHOULD CONSIDER THAT COPY TO BE A PART OF YOUR CLIENT RECORD AND SUBJECT TO BEING RETURNED.

2) SINCE TAX PRACTITIONERS ARE GOVERNED BY SEVERAL SETS OF ETHICS RULES REQUEST OF CLIENT ARE MORE COMLEX IN THE TAX ENGAGENENT.

THE DIFFERENT RULES DO NOT PROVOIDE CONSISTENT STD. OF TAXES PRACTITONERS IN RESPONDING TO CLIENT REQUEST . MANY TIMES CLIENT HAVE NOT PAID FOR THE PROF. SERVICES AND THE CPA MAY WISH TO WITHHOLD REQYEST RECORDS UNTILL THE CLIENT PAYS THE UNPAID PROF.SERVICES INVOICES.

EXAMPLE: MR A , a CPA has provided services to Mr Z AND PREPARED SOME RECORDS ,NOW Z WANTS THESE RECORDS BUT DENIES TO CLAR THE BILLS SO Mr A HAS THE RIGHT TO REATIN RECORDS.

3) SECTION 11 OF CPA LAW IS TITLED " OWNERSHIP PF WORKING PAPER " .THIS LAW IS ORGANISED IN TWO SUBSECTIONS FIRST TO ADDRESS THE ISSUE OF WORK PAPER OWNERSHIP WHICH SAYS THAT IN ESSENCE THAT all working paper and records prepared for cilent engagement are the property of accountant in absence of agreement to the contrary".

example : like questitoners prepraed by the practitioners are the property of practitioner so must be withhold by him..............conclusion side we can say cpy may withhold working papers,