(A6)M8-M9 Flashcards
what are the principles (framework) of the AICPA code of conduct? “RIP ODS”
responsibilities- exercise sensitive professional and moral judgement
public interest- honor public trust
integrity- “what is right and just”
objectivity and independence- free of conflicts of interest. independent in fact and appearance
due care- strive to improve competence and quality of service
scope and nature of services
what are the rules (govern) of the AICPA code of conduct? (11)
independence (public practice)
integrity and objectivity
general standards
compliance with standards (e.g., PCAOB)
accounting principles
confidential client info
contingent fees
acts discreditable
advertising and other forms of solicitation
commissions and referral fees
form of organization and name
who are generally subject to the independence rule?
covered member and covered member’s spouse and dependents
list those who would be considered covered members
individual on attest engagement team
individual in a position to influence the attest engagement
partner who provides more than 10 hours of non-attest services to the attest client within any fiscal year
partner in the office in which the lead attest engagement partner primarily practices in connection with the attest
engagement
the firm, including firm’s employee benefit plans
an entity for which operating, financial, or accounting policies can be controlled by any of the described above
what are some financial situations that do not impair independence?
fully collateralized car loans with a financial institution client
cash advance or credit card balance not exceeding $10,000
a bank account that is fully insured by the government
a passbook loan
what standards fall under the General Standards Rule?
professional competence- technical qualifications of CPA, ability to supervise/evaluate work, ability to obtain necessary knowledge
due professional care- critically review work of others, act as a reasonable CPA would
planning an supervision- self explanatory
sufficient relevant data- obtain in order to afford reasonable basis for conclusions
when are contingent fees allowed; not allowed?
allowed:
when fees are fixed by courts or other public authorities (e.g., representing a client in an examination of a tax return by an IRS agent)
compilations of FS expected to be used by third parties only
not allowed:
audits, FS reviews, examinations of prospective financial info, preparing taxes (public practice)
for audits of issuers, what are considered permissible non-audit services?
tax compliance, planning, and advice
