Taking Account of Ethics Access the AICPA s Code of Professional Conduct On ET section 102 integrity and Objectivity is related professional work ethic 02 102 1 Knowing misrepresentations in the preparation of financial statements or records At this section it discusses how important a professional accountant perform his duties contain fact material financial statement and correct information The misrepresented facts and misleading information will affect the trust of investor or client Moreover the most affection is the professional of accountant The case of misrepresentation of financial statements The 5 million suit Auto Owners Insurance Co filed against Touche Ross Co for misrepresentation of financial statements is one of many the firm faces when their accounts file for bankruptcy Auto Owners filed suit against Touche in April claiming the CPA firm committed professional malpractice in its preparation of financial statements for Phoenix Contractors Inc during the years of 1981 1982 and 1983 Rivers A 1986 Bonding firm sues touche Grand Rapids Business Journal 4 11 1 1 Retrieved from http search proquest com docview 216746407 accountid 32521 03 102 obligations of a member to his or her employer s external accountant This section is related to 01 Rule 102 integrity and objectivity with more detail explanation The way of providing professional service in CPAs in commerce and industry while required to meet the same high ethical standards as accountants in public practice often must handle ethical issues differently At this section covers a member s obligations in dealing with an employer s external accountant says that simply answering all questions truthfully and factually is not sufficient if the external auditor should know material information that is not disclosed by the company he has violated the code Handler L D 1994 A question of ethics Journal of Accountancy 178 4 111 111 Retrieved from http search proquest com docview 206758669 accountid 32521 Above two sections makes me think of scandal of Enron according tax regulation from IRS the one of reason of Enron is The transactions were extremely complex requiring Enron to set up hundreds of partnerships based in foreign tax havens Enron was assisted in setting up these partnerships by some of Wall Street s biggest banks and law firms The Tax Court ruled in Enron s favor Enron is misrepresentations in the preparation of financial statements or records and lost the information of its candid Bartlett B 2002 Feb 11 Was the IRS behind Enron Human Events 58 16 16 Retrieved from http search proquest com docview 235861532 accountid 32521