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(Ethics & Auditing Question) Sam works for a CPA firm. The CPA first is auditing the firms largest client which is a major corporation and an SEC company. Sam is the audit manager on this audit. Sam's daughter is 5 years old and recently recieved a gift from a relative who lives very far away. The gift was 10 shares of the company Sam is auditing. Sam did not know his daughter would recieve this gift of the stocks but knows about it now? What happens next? What is the situation at hand and what should Sam do? I realize the amount is immaterial but one must refer to the AICPA Code of Ethics standards. What does one do if the audit has impaired independence.
1. Identify the problem
2. Identify the possible courses of action.
3. Identify any contraints relating to the decision.
4. Analyza the likely effects of the possible courses of action.
5. Select the best course of action.
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