In 2004, the Government Accountability Office (GAO) conducted an investigation of tax shelters of 61 Fortune 500 users of tax shelters provided by accounting firms that were their external auditors covering more than one year between 1998-2003. In each case the company received benefits from the tax shelter 61 companies had 82 transactions worth about $3.4 billion in estimated potential tax losses generally reportable to the IRS.
What are the potential ethical dangers for an audit firm that provides tax shelters for an audit client? Is it ethically appropriate to do so under the profession ethical standards?