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Terms in this set (63)What are the 10 steps in the ethical decision making model? Step One: Recognize the Ethical Issue What does recognizing a potential ethical issue look like? identify the dilemma including facts, contexts and parties involved What does considering your comfort level look like? "If you had to discuss your decision in public, would you be concerned about how it reflects on your ethics?" What is the difference between the AICPA, SEC, PCAOB, and your State Board of Public Accountancy? Professional organizations (AICPA) What is the new structure of the AICPA Ethics Codification? What are the 4 sections? Preface What are the 6 "pillars" or principles of the code? Responsibilities 6 Pillars: Responsibilities In carrying out your professional responsibilities, you should exercise sensitive professional and moral judgment 6 Pillars: The Public Interest You should act in a way that will serve the public interest, honor the public trust, and demonstrate your commitment to professionalism 6 Pillars: Integrity To maintain and broaden public confidence, you should perform all professional responsibilities with the highest sense of integrity (being honest even when no one is looking or "above reproach"). 6 Pillars: Objectivity & Independence You should maintain objectivity and be free from conflicts of interest in discharging your professional duties. 6 Pillars: Due Care You should observe the profession's technical and ethical standards, strive continually to improve competence and the quality of services, and discharge professional responsibility to the best of your ability.
6 Pillars: Scope and Nature of Service As a member in public practice, you should observe the principles of the AICPA Code in determining the scope and nature of services to be performed What is the "Professional Creed"? As a professional CPA, I willingly accept my responsibility (1) to serve the public interest, (2) to maintain and broaden public confidence by performing all my responsibilities with integrity, (3) to maintain my objectivity and be free of conflicts of interest, and to discharge all of my responsibilities with due care. What are the AICPA rules on receiving gifts from a client? What factors should be considered? Do bribes/fancy dinners/gifts impair your ability to be objective? 1) Self-interest- threat that you could benefit financially or
otherwise from a client; harms objectivity What is the definition of professional competence according to the AICPA? Each CPA should evaluate whether his/her education, experience, and judgment are adequate for the responsibilities assumed Be diligent- render services promptly and carefully, be thorough, and observe applicable technical and ethical standards Due care- adequately plan and supervise professional activities What's an example of having competence as a CPA? EX: technical skills What does it mean to conduct your responsibilities with "due care"? Does this mean you need to be perfect or infallible? 1) Discharge professional responsibilities with competence and diligence How do CPAs apply the AICPA conceptual framework in regard to threats and safeguards? 1) Identify threat(s) to compliance with one or more rules In what situations can you disclose confidential client information (4 exceptions)? 1) To comply with requirements of other professional standards (audit, review, or tax standards). What are the rules on returning client-provided records? Records belonging to the client or provided to the CPA by or on behalf of the client should always be returned on request What category does withholding client-provided records fall under? Acts Discredible As a CPA preparing a client's financial statements, can you withhold your own working papers and work product if the client has not paid you? YAS What are the AICPA ethics rules relating to advertising? 1) You can't advertise your CPA firm in a manner that is false, misleading, or deceptive Violating an AICPA or IRS rule may result in what type or types of consequences? Loss of CPA license Regarding independence, when should an AICPA member use the Conceptual Framework? Step 1: Identify
threats to independence that arise from circumstances (For example: you have a financial interest with the client) What does "attest engagement" mean? What are the 4 examples of attest engagements? CPA's expression of an opinion (qualified or unqualified) or some other form of assurance that the information being reported on is free of material misstatement 1) Financial statement audits What does it mean to be a "covered member"? Anyone in the CPA firm (member of the AICPA) who must avoid certain financial and business relationships with an attest client to maintain independence. What are the 6 categories of covered members? 1) The Firm What would be an example of someone in a firm who is not a covered member? A manager who provides less than 10 hours of attest services For what period of time must you be independent of the client? Is it continuous or does it start and stop? Begins when a firm accepts a new attest client and then continues the entire duration of the attest relationship, or the professional engagement. Who is "immediate family" under the code? What are examples of "spousal equivalents"? Spouse or spousal equivalent What are examples of "key positions" at the client? Board Member Can an immediate family member be in one of these key positions? Nah ! Who is considered a "close relative" under the AICPA rules? Nondependent children (you do not provide more than half of their financial support) What are the 3 types of permitted loans from financial institutions that do not impair independence? 1) Car loans What are the rules on grandfathered loans? Independence will NOT be impaired by home mortgages, unsecured loans that are not material to your net worth How must a person disassociate from the client before becoming a covered member if they were previously employed by the client? Persons who were associated with a client must disassociate from the client
before becoming a covered member by: If you are a member of the attest engagement team, what independence safeguards should you apply if your client offers you a job? Promptly report to the appropriate person in your firm any employment negotiations with the client. What are contingent fees? Are they permitted under the AICPA code of professional conduct? No fee is charged unless a specified result is attained; or Not allowed under AICPA What is the client's responsibilities when you provide nonattest services? 1) Accepting responsibility for the services What are your responsibilities as an AICPA member when you provide nonattest services to a client? Document in writing should establish understanding regarding: What a member performs nonattest services for an attest client, management is required to designate an individual to oversee those services. What qualities are required of that supervisor? Designating an individual with suitable skill, knowledge or experience (senior management) to oversee services performed What are the management responsibilities that you cannot do for an attest client? Think of some examples. 1) Authorization What are the prohibited relationships that extend beyond just covered members to all partners and professionals in a firm? Trustee of a trust; or When would a CPA firm be subject to the SEC and PCAOB independence rules? Public client ! What relationships between a covered member and an SEC audit client are prohibited? if the covered member and client have a jointly-held investment that is material to the net worth of the covered member Under jointly-held investments, what arrangement would not be prohibited under SEC rules? Immaterial landlord-tenant relationships. If you're working as an accountant for a private company, do the SEC rules apply to you? If there's any possibility that the client may go public, follow the more-restrictive SEC rules To whom does the one year "cooling-off" period apply? Audit team members If your client is an SEC registrant, what nonattest services are you not allowed to perform? 1) Bookkeeping What is the market concentration rule? Why might that impair your independence? The SEC may raise issues if one audit client or group of such clients provides 15% or more of the audit firm's total revenues What are some examples of situations that may threaten your independence under the GAO conceptual framework? 1) As close friend is a director or officer of the audit client, or employed by the client (familiarity threat) What are the five ethical principles under the GAO's Yellow Book? 1) Public Interest What does it mean to follow the fifth principle that is unique to the GAO? Government information, resources, and positions are to be used for official purposes and not inappropriately for the auditor's personal gain or in a manner contrary to law or detrimental to the legitimate interests of the audited entity or the audit organization How does the IESBA code impact the AICPA (the U.S. accounting profession)? AICPA is required to adopt rules that are at least as restrictive as the IESBA code. How are the AICPA and IESBA codes similar? Both the IESBA and AICPA incorporate the conceptual framework approach for evaluating threats when specific rules on an issue do not exist. Department of Labor independence rules apply to what types of services? Apply to audits of employee benefit plans subject to ERISA requirements How do DOL independence rules differ from the AICPA independence rules? Generally more restrictive than AICPA rules DOL independence rules differ from the AICPA rules especially in the definition of "member" -- define much more broadly than AICPA's covered member What does the FDIC publish that addresses auditor independence for banking clients? FDIC policy statements What are SSTS and who do they apply to? Statements on Standards for Tax Services (SSTS) When can a tax return preparer not rely on a client's representations according to SSTS 3? Incorrect; Which SSTS deals with client errors? What steps should you take if the client does not agree to correct an error on its tax return? SSTS 6 SSTS 1 deals with disclosing tax return positions. If a client refuses to disclose something on their tax return, what steps should you take as a preparer? Consider whether to withdraw from the engagement and reevaluate the relationship. Sets with similar termsAICPA FINAL66 terms parmeshawn Audit Midterm Exam: Ch 3 Professional Ethics52 terms johnfrisina Chapter 1973 terms tmckinney777 Accounting Ethics Exam #351 terms jt_shiverick Sets found in the same folderChapter 4 Q & A20 terms abbyleigh2014 ACCT 4553 (Ethics) Final Review53 terms Mmw123455 Ethics Final116 terms emma_verplank6 Ethics Final Lesson 7-1435 terms kasidi_hardy9PLUS Other sets by this creatorAIS Midterm COSO Framework17 terms kelsey_kauffman3 LSB Exam 479 terms kelsey_kauffman3 Tax Exam 245 terms kelsey_kauffman3 LSB Exam 3105 terms kelsey_kauffman3 Other Quizlet setsphysiology unit 1 skel muscle102 terms hmcleckler McElroy chapter 20 study terms26 terms mckenzie_ann_seidel Psych Exam 320 terms Michelle_Lewis843 Extended overview of Nervous system (1)121 terms verilynn_michellePLUS Which of the following best describes competence as described by the aicpa code of professional conduct?The correct answer is b. The application of skill and knowledge with reasonable care and diligence.
What does the integrity principle of the aicpa Code of Professional Conduct address?Under the AICPA Code of Professional Conduct, in the performance of any professional service, a member must maintain objectivity and integrity, shall be free of conflicts of interest, and shall not knowingly misrepresent facts.
What are the 6 principles of the aicpa code of professional conduct?The principles are: Responsibilities Principle, The Public Interest Principle, The Integrity Principle, Objectivity and Independence Principle, Due Care Principle, and the Scope and Nature of Services Principle.
Which of the following is a principle of aicpa code of professional conduct?The CPA profession has long been bound by a distinctive ethical code that is based on the fundamental principles of integrity, objectivity, independence, due care and serving the public interest.
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Which phrase is used by the AICPA Code of Professional Conduct to describe integrity quizlet?
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