Question-2-[8 Marks]

Identify the Ethical issue that should be taken for each of the following independent cases, and explain the appropriate response to be taken by the CPA:

You are expected to make appropriate:

assumptions, explanations & Justifications.

1. DAN CPA firm was hired by ABC Co. to help it determine whether it should acquire XYZ Co. As DAN consultants analysed the situation, they realized that XYZ was an even better fit for one of its long-standing consulting clients, MEL Co. DAN was collecting consulting fees from both ABC and MEL in their pursuit of XYZ.

2. DAN CPA firm was hired by ANB Co. to determine whether it would make financial sense to file a major antitrust lawsuit against one of its competitors, BOD Co. BOD is an audit client of DAN.

3. DAN's client, LMN Co., fired DAN as its tax accountant and demanded return of the records it had provided DAN & Copies of related working papers made by DAN. LMN Co. still owes DAN money for services provided.

4. DAN CPA firm has been approached by LMN Co. to do tax services on a contingent fee basis. Answer on the base of following conditions:

1. DNA CPA firm wishes to represent LMN before a revenue agent examining LMN's income tax return & LMN is not a client of the firm.
2. DNA CPA firm wishes to represent LMN before a revenue agent examining LMN's income tax return & LMN is not a client of the firm.
3. DNA CPA firm wishes to do XYZ Company's original tax return on a contingent fee basis& LMN is not a client of the firm.
4. DNA CPA firm wishes to do XYZ Company's original tax return on a contingent fee basis& LMN is a client of the firm.