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Ethics: Experts Accountants CPA Fimm (EA), hired an advertising firm to help rise revenues. One of the ads that the firm ran misrepresented the experience of EA's accountants. Another ad stressed that EA had so many former Income & Sales Tax Department agents working in its tax division that the income & Sales Tax Department wouldn't dare look closely at the tax retums prepared by EA. Billy, an EA accountant, was careful with his clients' confidential information, but his administrative assistant, Suzan, was not. Suzan was responsible for several disclosures of client confidential information. The firm became upset with these disclosures and fired Billy for not preventing them. Billy, now that he was no longer an accountant for any of his former clients, began disclosing their confidential information with reckless abandon. Billy had been a workhorse for EA and once the firm had fired him, it soon was substantially behind on its tax work. It assigned some of the tax work out to another firm, pursuant to a contract under which the other firm would ensure that it had state-of-the-art procedures for ensuring confidentiality and promised to keep all of EA's clients' information confidential. EA also received the permission of each of its clients to outsource their tax work. The EA wishes to audit ABC Co., a private company, on a contingent fee basis. EA wishes to do XYZ Company's original tax return on a contingent fee basis. Requirements: Analyse EA's situation and answer each of the following questions: 1- Is EA going to be in trouble should one of the firms to which it outsourced tax work happen to disclose one of EA's client's confidential information? 2- Should EA get permission from its clients to outsource their tax work before doing so? 3- Is EA permitted to audit ABC Co. a private company on a contingent fee basis? 4- Is EA permitted to do XYZ Company's original tax return on a contingent fee basis if XYZ Company is a clientot a client of EA

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