CPA Frank has responsibilities to inform client Brandon about the overcharge. As a CPA, Frank must disclose errors to clients per AICPA and IRS rules. There are also potential ethics issues with sharing client information with third parties without a non-disclosure agreement. Frank should have ensured client data was protected before sharing tax information with other firms. All services provided to clients must also maintain professional competence and accuracy.

1. Final Exam - Take Home Ethics Question 1
Running Head: Final Exam - Take Home Ethics Question
Final Exam - Take Home Ethics Question
Customer inserts his/her name:
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Final Exam - Take Home Ethics Question

2. Final Exam - Take Home Ethics Question 2
Question 1
Whether CPA Frank has responsibilities to inform Brandon of the overcharge in the tax
matters
As American Institute of Certified Accountants, (2009), puts it, CPA Frank Wells has
the responsibility to inform the client who is Brandon about the true status of the accounts in
respect to the tax positions. This is because the taxing authorities which include AICPA and
SSTS have specific disclosure and reporting standards that are supposed to be followed by
the members. The file tax return of the tax payer is supposed to be complete, correct and true
for the taxation system to work effectively. The third party or the tax practitioner has
responsibilities both to the tax payer and to the tax system.
As stated by Statement on Standards for tax Services No. 6, (2000), a member who
may be the practitioner representing the client or a third party provider is supposed to
promptly report to the tax payer if he becomes aware of an error in the tax returns that were
previously filed. The corrective measures should be recommended by the member to the
taxpayer. Based on this, CPA Frank has the responsibility of informing Brandon about the
error that he has found and the client will know that he is being overcharged by the attorney
for his deceased grandmother’s estate. This is because the value of the total estate will
reduced after the error is corrected and the payment to the attorney will reduce.
Question 2 – Multiple potential ethic issues that exist with the client situation
According to Ethics Ruling no.1 under AICPA Code of professional Conduct rule 301,
(2006), the practitioners for the taxation matters are supposed to be aware of their obligation
which includes safeguarding the data of the client as a requirement of the federal law. Before
disclosing any information to a third party, the practitioners are supposed to perform due

3. Final Exam - Take Home Ethics Question 3
diligence. The third party provider who is to be provided with the information of the client is
supposed to be able to protect non-public information that belongs to a client.
As illustrated by AICPA Code of Professional Conduct, (2011), the practitioner who
acts on behalf of the client is supposed to have a contract between him and the third party
provider and the contract should contain appropriate provisions that protect the privacy of the
client. The practitioners are advised to take precautions and make sure that no confidential
information is released through the outside services provided. In our case, the tax attorney
hired a new CPA Frank Wells for the services and he sold the information about tax to a third
party. This was against the ethics because there was no contract agreement between them to
maintain the secrecy of the information.
Under Rule 201, of the AICPA Code of Professional conduct, the professionals who
deal with the tax matters are supposed to perform all services with professional care and due
professional competence. The services provided are supposed to be accurate and complete.
As suggested by Desmond, (2002), section 230 contains a rule of due diligence to the conduct
of the practitioners. The conduct that was covered by the rule includes the tax advice which
may be oral or written. There are rules and conduct that are contained in Circular 230
concerning the preparation of tax returns. The person who is preparing the tax returns is not
supposed to use the outcome of any position to charge the fee for preparing an original return.
A client is supposed to be charged an unconscionable fee by the practitioner for
representation.
References

4. Final Exam - Take Home Ethics Question 4
AICPA Code of Professional Conduct, Rule 301, (2006), ET section 391.001–.002, (Online),
Available from http://www.aicpa.org/Research/Standards/CodeofConduct/Pages/et_391.aspx
Viewed on 17 May 2011
AICPA Code of Professional Conduct, (2011), (Online), Available from
http://www.aicpa.org/INTERESTAREAS/INFORMATIONTECHNOLOGY/RESOURCES/
PRIVACY/FEDERALSTATEANDOTHERPROFESSIONALREGULATIONS/AICPACOD
EOFPROFESSIONALCONDUCT/Pages/default.aspx. Viewed on 17 May 2011
American Institute of Certified Accountants, (2009), Statement on Standards for Tax Services
(Online), Available from,
http://www.aicpa.org/InterestAreas/Tax/Resources/StandardsEthics/StatementsonStandardsfo
rTaxServices/DownloadableDocuments/SSTS,%20Effective%20January%201,%202010.pdf
Viewed on 17 May 2011
Desmond, M, J., (2002), Opinion Standards for Tax Practitioners Under
U.S. Department of the Treasury Circular 230. (Online), Available from
http://www.itdweb.org/documents/Desmond.pdf. Viewed on 17 May 2011
Tax Executive Committee, (2000), Statement on Standards for tax Services No. 6, (Online),
Available from,
http://www.aicpa.org/InterestAreas/Tax/Resources/StandardsEthics/StatementsonStandardsfo
rTaxServices/DownloadableDocuments/SSTS%202000-2009.pdf Viewed on 17 may 2011