(1) A firm, permit holder, certificate holder, or license holder shall not commit any act discreditable to the profession. A discreditable act will be considered to have occurred if, for example:

(a) a firm or permit holder retains any records rightfully belonging to the client in order to enforce payment of fees.

(b) a firm or permit holder fails to follow required standards or procedure required in governmental audits and does not disclose in his report the fact that such requirements were not followed and the reasons therefor. Engagements for audits of government grants, government units or other recipients of government monies typically require that such audits be in compliance with government audit standards, guides, procedures, statutes, rules, and regulations, in addition to generally accepted auditing standards. If a member has accepted such an engagement and undertakes an obligation to follow specified government audit standards, guides, procedures, statutes, rules and regulations, in addition to generally accepted auditing standards, he is obligated to follow such requirements.