AICPA Code of Professional Conduct Flashcards
what are the six major principles of AICPA code of professional conduct?
- responsibilities
- public interest
- integrity
- objectivity and independence
- due care
- scope and nature of services
define responsibilities principle
major principle of aicipa code of professional conduct
-in carrying out responsibilities as professionals, members should exercise sensitive professional and moral judgment
define public interest principle
major principle of aicipa code of professional conduct
- members should accept the obligation to act in a way that will
1. serve the public interest,
2. honor the public trust and
3. demonstrate a commitment to professionalize
define integrity principle
major principle of aicipa code of professional conduct
- to maintain and broaden public confidence, members should perform all professional responsibilites with the highest sense of integrity
- what is right and just
define objectivity and independence principle
major principle of aicipa code of professional conduct
- independent in fact and appearance
- objectivity is a state of mind that requires
- -impartiality
- -intellectual honesty
- -freedom from conflict of interest
who must be independent vs. have objectivity and integrity
members in public practice must act with independence and act with objectivity and integrity
everyone else must only have objectivity and integrity and not independence
define due care principle
major principle of aicipa code of professional conduct
- observe profession’s technical and ethical standards
- strive continually to improve competence and the quality of services
- discharge professional responsibility to best of members ability
what is required by competence of a aicpa member
continued learning
from research and consultation with experts
due care entails…
- adequate planning of engagements
- supervision of professional activities for which members are responsible
scope and nature of services principle
major principle of aicipa code of professional conduct
- should observe the principles of the code of professional conduct in determining the scope and nature of services to be provided
attest engagement
An engagement that requires independence, as set forth in the AICPA Statements on Auditing Standards (SASs), Statements on Standards for Accounting and Review Services (SSARSs), and Statements on Standards for Attestation Engagements (SSAEs
define close relative
A parent, sibling, or nondependent child.
covered member
a. an individual on the attest engagement team.
b. an individual in a position to influence the attest engagement.
c. a partner, partner equivalent, or manager who provides more than 10 hours of nonattest services to the attest client within any fiscal year. Designation as covered member ends on the later of (i) the date that the firm signs the report on the financial statements for the fiscal year during which those services were provided or (ii) the date he or she no longer expects to provide 10 or more hours of nonattest services to the attest client on a recurring basis.
d. a partner or partner equivalent in the office in which the lead attest engagement partner or partner equivalent primarily practices in connection with the attest engagement.
e. the firm, including the firm’s employee benefit plans.
f. an entity whose operating, financial, or accounting policies can be controlled by any of the individuals or entities described in items a–e or two or more such individuals or entities if they act togethe
direct financial interest
A financial interest that is
a. owned directly by an individual or entity, including those managed on a discretionary basis by others.
b. under the control of an individual or entity, including those managed on a discretionary basis by others.
c. beneficially owned through an investment vehicle, estate, trust, or other intermediary when the beneficiary
i. controls the intermediary or
ii. has the authority to supervise or participate in the intermediary’s investment decisions.
When used in this definition, the term control includes situations in which the covered member has the ability to exercise such control, either individually or acting together with his or her firm or other partners or professional employees of his or her firm
financial interest
An ownership interest in an equity or a debt security issued by an entity, including rights and obligations to acquire such an interest and derivatives directly related to such interest.