Discussion Post
Doolittle LLP, a CPA firm, has been doing financial statement auditing for Honesty Corp. for the last 10 years. While auditing last year's financial statements of Honesty, Doolittle finds out that Honesty has overstated assets by 12 percent and revenues by 19 percent to make up for the huge losses it incurred. When Doolittle informed the management of Honesty about this illegal act, Honesty's management threatened to cancel Doolittle's contract with Honesty and demanded back the corporate records and working papers from Doolittle. Should Doolittle give them back? Who owns them? Who has right of access to them? If Doolittle is forced by Honesty to destroy those papers, under which act can Doolittle be punished? Does the AICPA Code of Professional Conduct address this type of situation? If so, identify and provide a summary of that portion of the AICPA Code of Professional Conduct.
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