Considering the principles of Accountants Code of Ethics, it can be said that Peter Harmon has not violated the principles of professional ethics. As per the principles under section 240-241, Code of ethics B, consideration of professional accountant in public practice includes referral fee or commission if it is not received or paid that creates self- interest threat with respect to objectivity, integrity and professional competence and due care. Professional ethics on competence and due care requires the accountants to possess skills and knowledge to provide competent services in order to act diligently for clients (Bonaci et al. 2013). However, in the given case 10% commission received by Peter Harmon for sale of computer services is in accordance with the principles of Accountants Code of Ethics.
According to the principles of Accountants Code of Ethics, professional accountant or auditor is required to maintain the confidentiality of clients’ business and necessary information. In the given situation, David Smith, an auditor referred ten clients to the Allied Insurance Company without their awareness hence, it can be said that David has violated the principles of ethics in terms of confidentiality. Code of ethics regulation provides that professional auditor is required to maintain clients’ confidentiality to keep the business information private (Bampton and Cowton 2013). Auditor can disclose certain information only is it is required by legislation and with the permission of respective clients. David as an auditor referred ten clients without client’s knowledge hence, he is contented to have violated confidentiality and professional behavior and would be held under APES 110 for professional misconduct.
As per ethical code APES 110, profession accountants and auditor is required to maintain integrity, objectivity and professional competence and due care. Wrench & Company, Chartered Accountant in the given situation maintains details of clients in the computer records to use as per the requirement. In order to assist the clients for input data Wrench and company is able to arrange the members from administration as well as audit branch while the audit staffs can be involved for client audit if required by audit partners. Accordingly, the company said to have violated the ethical principles in terms of