The case of the faulty Lizst
Ethics
Charles Selcer, CPA, MBA | April/May 2022 Footnote
Editor's note: Updated March 29, 2022
Chekov Lizst, CPA is the controller at Marginal Rentals, and is an audit client of Kibbel & Bitz, CPAs. With the specter of finally having to implement the new lease accounting standard, Chekov called Alpha Bitz, the partner on their audit engagement and told him he needed the firm to visit Marginal Rentals to design a control system to implement the accounting for leases.
Q: Does this impair Kibbel & Bitz’s independence?
A: Yes.
Kibbel & Bitz can provide advice and recommendations related to the application of the accounting standard, including:
- Analyzing and advising management on the potential impact of the accounting standard on the entity’s accounting policies, procedures and internal controls.
- Recommending possible revisions to existing policies, procedures and internal controls.
- Assisting the attest client with summarizing the attest client’s analysis and policies related to the accounting position under the standard.
- Proposing transition calculations based on application of the accounting standard subject to management’s review and approval.
However, they cannot be charged with designing an internal control. PEEC discussed this proposed new standard Feb. 16–17, 2022.
Ethics Corner
22WX-0031: Ethics at Work: Diversity, Equity and Inclusion (Webinar)
April 25 | 9:30–11:30 a.m. | 2 Ethics
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April 27 | Noon–3:30 p.m. | 4 Ethics
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May 12 | 9–11 a.m. | 2 Ethics
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