AUD 2 Professional Responsibilities and Ethics 3 Flashcards
1
Q
Many CPA firms provide a variety of nonattest services for their attest clients, the most common of which include
bookkeeping;
tax compliance; and
nontax disbursement services; such as payroll services.
The performance of nonattest services may create s___ - ______, m___________ participation, or a______ threats to independence.
A
Performance of Nonattest Services and Independence
Many CPA firms provide a variety of nonattest services for their attest clients, the most common of which include
bookkeeping;
tax compliance; and
nontax disbursement services; such as payroll services.
The performance of nonattest services may create self-review, management participation, or advocacy threats to independence.
2
Q
The performance of nonattest services may create self-review, management participation, or advocacy threats to independence.
When s_________ threats to independence exist during either
the period during which the professional engagement is being performed, or
the period covered by the financial statements that are the subject of the attest service,
they must be reduced to an _________ level or independence will be impaired.
A
Performance of Nonattest Services and Independence
The performance of nonattest services may create self-review, management participation, or advocacy threats to independence.
When significant threats to independence exist during either
the period during which the professional engagement is being performed, or
the period covered by the financial statements that are the subject of the attest service,
they must be reduced to an acceptable level or independence will be impaired.
3
Q
Certain nonattest services create threats to independence that cannot be reduced to an acceptable level.
These will not prevent the CPA from performing an attest service for such a client if:
- The nonattest services were performed p____ to the period in which the attest services were performed;
- The nonattest services relate to periods p____ to the periods covered by the financial statements that are the subject of the attest services;
A
Performance of Nonattest Services and Independence
Certain nonattest services create threats to independence that cannot be reduced to an acceptable level.
These will not prevent the CPA from performing an attest service for such a client if:
- The nonattest services were performed prior to the period in which the attest services were performed;
- The nonattest services relate to periods prior to the periods covered by the financial statements that are the subject of the attest services;
4
Q
Certain nonattest services create threats to independence that cannot be reduced to an acceptable level.
These will not prevent the CPA from performing an attest service for such a client if:
• The financial statements for the period during which the nonattest services were performed were attested to by a______ CPA.
A
• The financial statements for the period during which the nonattest services were performed were attested to by another CPA.
5
Q
Certain non_____ services create threats to __________ that cannot be reduced to an acceptable level.
These will not prevent the CPA from performing an attest service for such a client if:
- The non_____ services were performed prior to the period in which the attest services were performed;
- The non_____ services relate to periods prior to the periods covered by the financial statements that are the subject of the attest services; and
- The financial statements for the period during which the nonattest services were performed were ______ed to by another CPA.
A
Performance of Nonattest Services and Independence
Certain nonattest services create threats to independence that cannot be reduced to an acceptable level.
These will not prevent the CPA from performing an attest service for such a client if:
- The nonattest services were performed prior to the period in which the attest services were performed;
- The nonattest services relate to periods prior to the periods covered by the financial statements that are the subject of the attest services; and
- The financial statements for the period during which the nonattest services were performed were attested to by another CPA.
6
Q
Certain nonattest services create threats to independence that cannot be reduced to an acceptable level.
These will not prevent the CPA from performing an attest service for such a client if:
• The financial statements for the period during which the nonattest services were performed were attested to by another CPA.
o If the attest engagement is an audit, the prior financial statements were audited by another CPA.
o If the attest engagement is a review, the prior financial statements were audited or r\_\_\_\_\_ed by another CPA.
A
Performance of Nonattest Services and Independence
• The financial statements for the period during which the nonattest services were performed were attested to by another CPA.
o If the attest engagement is an audit, the prior financial statements were audited by another CPA.
o If the attest engagement is a review, the prior financial statements were audited or reviewed by another CPA.
7
Q
Certain nonattest services create ______s to independence that cannot be reduced to an acceptable level.
These will not prevent the CPA from performing an attest service for such a client if:
- The nonattest services were performed prior to the period in which the attest services were performed;
- The nonattest services relate to periods prior to the periods covered by the financial statements that are the subject of the attest services; and
- The financial statements for the period during which the nonattest services were performed were attested to by another CPA.
A
Performance of Nonattest Services and Independence
Certain nonattest services create threats to independence that cannot be reduced to an acceptable level.
These will not prevent the CPA from performing an attest service for such a client if:
- The nonattest services were performed prior to the period in which the attest services were performed;
- The nonattest services relate to periods prior to the periods covered by the financial statements that are the subject of the attest services; and
- The financial statements for the period during which the nonattest services were performed were attested to by another CPA.
o If the attest engagement is an audit, the prior financial statements were audited by another CPA. o If the attest engagement is a review, the prior financial statements were audited or reviewed by another CPA.
8
Q
Nonattest Services:
bookkeeping
tax compliance
payroll
advisory services
benefit plan administration
business risk and corporate finance consulting
executive or employee recruiting
forensic accounting
information systems design
Internal audit
investment advisory or management services
preparing the financial statements
A
Performance of Nonattest Services and Independence
Nonattest Services:
bookkeeping,
tax compliance,
payroll,
advisory services;
appraisal, valuation, and actuarial services;
benefit plan administration;
business risk and corporate finance consulting;
executive or employee recruiting;
forensic accounting;
information systems design,
implementation, or integration;
Internal audit;
investment advisory or management services.
preparing the financial statements
performing a cash-to-accrual conversion or
reconciliations as part of the financial statement closing process
9
Q
Although a CPA may not perform certain non_____ services for an attest client
because they create threats to independence
that cannot be reduced to an acceptable level,
many non_____ services may be performed for an attest client without impairing independence.
A
Performance of Nonattest Services and Independence
Although a CPA may not perform certain nonattest services for an attest client
because they create threats to independence
that cannot be reduced to an acceptable level,
many nonattest services may be performed for an attest client without impairing independence.
In order to make certain that independence is not impaired when performing nonattest services for an attest client, the CPA will address three distinct components of the Code.
10
Q
In order to make certain that independence is not impaired when performing nonattest services for an attest client,
the CPA will address three distinct components of the Code.
- The CPA will evaluate the c__________ effect of all nonattest services
A
Performance of Nonattest Services and Independence
In order to make certain that independence is not impaired when performing nonattest services for an attest client,
the CPA will address three distinct components of the Code.
- The CPA will evaluate the cumulative effect of all nonattest services being performed for the client,
using a conceptual framework approach,
to determine if threats to independence are at an acceptable level.
11
Q
In order to make certain that independence is not impaired when performing nonattest services for an attest client,
the CPA will address three distinct components of the Code.
- The CPA will evaluate the cumulative effect of all nonattest services being performed for the client,
using a c_______ f________ approach, to determine if threats to independence are at an acceptable level.
A
- The CPA will evaluate the cumulative effect of all nonattest services being performed for the client,
using a conceptual framework approach, to determine if threats to independence are at an acceptable level.
12
Q
In order to make certain that independence is not impaired when performing nonattest services for an attest client,
the CPA will address three distinct components of the Code.
- The CPA will evaluate the cumulative effect of all nonattest services being performed for the client,
using a conceptual framework approach, to determine if ______s to independence are at an acceptable level.
A
- The CPA will evaluate the cumulative effect of all nonattest services being performed for the client,
using a conceptual framework approach, to determine if threats to independence are at an acceptable level
13
Q
In order to make certain that independence is not impaired when performing nonattest services for an attest client,
the CPA will address three distinct components of the Code.
- The CPA will apply the three general r_________s for performing nonattest services enumerated in the Code.
A
- The CPA will apply the three general requirements for performing nonattest services enumerated in the Code.
14
Q
In order to make certain that independence is not impaired when performing nonattest services for an attest client,
the CPA will address three distinct components of the Code.
- The CPA will evaluate the specific services being performed to make certain that none of them i_______ly raise threats to independence to an unacceptable level.
A
- The CPA will evaluate the specific services being performed to make certain that none of them individually raise threats to independence to an unacceptable level.
15
Q
In order to make certain that independence is not impaired when performing nonattest services for an attest client,
the CPA will address three distinct components of the Code.
- The CPA will evaluate the cumulative effect of all nonattest services
- The CPA will apply the 3 general requirements for performing nonattest services enumerated in the Code.
- The CPA will evaluate the specific services being performed to make certain that NONE of them individually raise threats to independence to an unacceptable level.
A
Performance of Nonattest Services and Independence
In order to make certain that independence is not impaired when performing nonattest services for an attest client,
the CPA will address three distinct components of the Code.
- The CPA will evaluate the cumulative effect of all nonattest services being performed for the client, using a conceptual framework approach, to determine if threats to independence are at an acceptable level.
- The CPA will apply the 3 general requirements for performing nonattest services enumerated in the Code.
- The CPA will evaluate the specific services being performed to make certain that none of them individually raise threats to independence to an unacceptable level.
16
Q
- Cumulative Effect of Multiple Nonattest Services
When a CPA performs multiple nonattest services for an attest client, the self-review and management participation threats may be elevated and the accountant should evaluate whether or not they are at an acceptable level and,
if they are not at an acceptable level, whether s________s that are in place, or that may be put into effect, will reduce them to an acceptable level.
A
Performance of Nonattest Services and Independence
- Cumulative Effect of Multiple Nonattest Services
When a CPA performs multiple nonattest services for an attest client, the self-review and management participation threats may be elevated and the accountant should evaluate whether or not they are at an acceptable level and,
if they are not at an acceptable level, whether safeguards that are in place, or that may be put into effect, will reduce them to an acceptable level.
17
Q
- Cumulative Effect of Multiple Nonattest Services
When a CPA performs multiple nonattest services for an attest client, the s___ - ______ and m_________ participation threats may be elevated
and the accountant should evaluate whether or not they are at an acceptable level and,
if they are not at an acceptable level, whether safeguards that are in place, or that may be put into effect, will reduce them to an acceptable level.
A
Performance of Nonattest Services and Independence
- Cumulative Effect of Multiple Nonattest Services
When a CPA performs multiple nonattest services for an attest client, the self-review and management participation threats may be elevated
and the accountant should evaluate whether or not they are at an acceptable level and,
if they are not at an acceptable level, whether safeguards that are in place, or that may be put into effect, will reduce them to an acceptable level.
18
Q
- Cumulative Effect of Multiple Nonattest Services
• The self-review threat
is the threat that occurs when a CPA uses
the r_____s of performing a service for a client
as a component of another service
without appropriately evaluating the service previously performed, including the judgments made while performing that service.
A
Performance of Nonattest Services and Independence
In order to make certain that independence is not impaired when performing nonattest services for an attest client, the CPA will address 3 distinct components of the Code.
- Cumulative Effect of Multiple Nonattest Services
• The self-review threat
is the threat that occurs when a CPA uses
the results of performing a service for a client, such as bookkeeping services,
as a component of another service, such as a review or an audit of the client’s financial statements,
without appropriately evaluating the service previously performed, including the judgments made while performing that service.
19
Q
- Cumulative Effect of Multiple Nonattest Services
• The self-review threat
is the threat that occurs when a CPA uses
the results of performing a service for a client
as a c________ of another service
without appropriately evaluating the service previously performed, including the judgments made while performing that service.
A
Performance of Nonattest Services and Independence
In order to make certain that independence is not impaired when performing nonattest services for an attest client, the CPA will address 3 distinct components of the Code.
- Cumulative Effect of Multiple Nonattest Services
• The self-review threat
is the threat that occurs when a CPA uses
the results of performing a service for a client, such as bookkeeping services,
as a component of another service, such as a review or an audit of the client’s financial statements,
without appropriately evaluating the service previously performed, including the judgments made while performing that service.
20
Q
- Cumulative Effect of Multiple Nonattest Services
• The self-review threat
is the threat that occurs when a CPA uses
the results of performing a service for a client
as a component of another service
without appropriately e______ing the service previously performed, including the judgments made while performing that service.
A
Performance of Nonattest Services and Independence
In order to make certain that independence is not impaired when performing nonattest services for an attest client, the CPA will address 3 distinct components of the Code.
- Cumulative Effect of Multiple Nonattest Services
• The self-review threat
is the threat that occurs when a CPA uses
the results of performing a service for a client, such as bookkeeping services,
as a component of another service, such as a review or an audit of the client’s financial statements,
without appropriately evaluating the service previously performed, including the judgments made while performing that service.
• The management participation threat is the threat that the CPA will assume management responsibilities.
21
Q
- Cumulative Effect of Multiple Nonattest Services
• The management participation threat
is the threat that the CPA will assume __________ ___________ies.
A
Performance of Nonattest Services and Independence
In order to make certain that independence is not impaired when performing nonattest services for an attest client, the CPA will address 3 distinct components of the Code.
- Cumulative Effect of Multiple Nonattest Services
• The management participation threat
is the threat that the CPA will assume management responsibilities.
22
Q
- Cumulative Effect of Multiple Nonattest Services
• The self-review threat
is the threat that occurs when a CPA uses
the results of performing a service for a client
as a component of another service
without appropriately evaluating the service previously performed
• The management participation threat
is the threat that the CPA will assume management responsibilities.
A
Performance of Nonattest Services and Independence
In order to make certain that independence is not impaired when performing nonattest services for an attest client, the CPA will address 3 distinct components of the Code.
- Cumulative Effect of Multiple Nonattest Services
• The self-review threat
is the threat that occurs when a CPA uses
the results of performing a service for a client
as a component of another service
without appropriately evaluating the service previously performed, including the judgments made while performing that service.
• The management participation threat is the threat that the CPA will assume management responsibilities.
23
Q
The 3 general requirements for performing nonattest services for an attest client are designed to reduce the ____ - ________ and ___________ participation threats to an acceptable level.
A
Performance of Nonattest Services and Independence
The 3 general requirements for performing nonattest services for an attest client are designed to reduce the self-review and management participation threats to an acceptable level.
24
Q
The fact that the 3 general requirements have been complied with does not e_______ the need to evaluate the services performed
in relation to all potential threats to independence as well as the cumulative effect of multiple nonattest services being performed for the attest client.
A
Performance of Nonattest Services and Independence
The fact that the 3 general requirements have been complied with does not, however, eliminate the need to evaluate the services performed in relation to all potential threats to independence as well as the cumulative effect of multiple nonattest services being performed for the attest client.
25
The fact that the 3 general requirements have been complied with does not eliminate the need to e________ the services performed
in relation to all potential threats to independence
as well as the c__________ effect of multiple nonattest services being performed for the attest client.
Performance of Nonattest Services and Independence
The fact that the 3 general requirements have been complied with does not, however, eliminate the need to evaluate the services performed
in relation to all potential threats to independence
as well as the cumulative effect of multiple nonattest services being performed for the attest client.
26
In order to make certain that independence is not impaired when performing nonattest services for an attest client, the CPA will address 3 distinct components of the Code.
2. Apply the 3 General Requirements for Performing Nonattest Services
The general requirements fall into three categories:
A. The client must accept its r________ies;
B. The accountant’s r________ies must be limited; and
C. A written understanding must be established with the client.
Performance of Nonattest Services and Independence
2. Apply the 3 General Requirements for Performing Nonattest Services
The general requirements fall into three categories:
A. The client must accept its responsibilities;
B. The accountant’s responsibilities must be limited; and
C. A written understanding must be established with the client.
27
2. Apply the 3 General Requirements for Performing Nonattest Services
The general requirements fall into three categories:
A. The client must accept its responsibilities;
B. The accountant’s responsibilities must be limited; and
C. A w______ understanding must be established with the client.
Performance of Nonattest Services and Independence
In order to make certain that independence is not impaired when performing nonattest services for an attest client, the CPA will address 3 distinct components of the Code.
2. Apply the 3 General Requirements for Performing Nonattest Services
The general requirements fall into three categories:
A. The client must accept its responsibilities;
B. The accountant’s responsibilities must be limited; and
C. A written understanding must be established with the client.
28
Complying with the general requirements will reduce ______s to an acceptable level.
The general requirements fall into three categories:
A. The client must accept its responsibilities;
B. The accountant’s responsibilities must be limited; and
C. A written understanding must be established with the client.
Performance of Nonattest Services and Independence
In order to make certain that independence is not impaired when performing nonattest services for an attest client, the CPA will address 3 distinct components of the Code.
2. Apply the 3 General Requirements for Performing Nonattest Services
The performance of nonattest services for an attest client increases threats to the CPA’s independence
and the CPA should apply safeguards to avoid impairment.
Specific nonattest services that a CPA may perform for an attest client raise threats to independence to an unacceptable level, which cannot be reduced to an acceptable level through the implementation of safeguards.
When that is not the case, however, complying with the general requirements will reduce threats to an acceptable level.
The general requirements fall into three categories:
A. The client must accept its responsibilities;
B. The accountant’s responsibilities must be limited; and
C. A written understanding must be established with the client.
29
A. C_____ Responsibilities
The first of the general requirements - the c____ and its management must agree to assume all management responsibilities.
The general requirements fall into 3 categories:
A. The client must accept its responsibilities;
B. The accountant’s responsibilities must be limited; and
C. A written understanding must be established with the client.
-----------
A. Client Responsibilities
The first of the general requirements - the client and its management must agree to assume all management responsibilities.
30
A. Client Responsibilities
The first of the general requirements - the client and its management must agree to assume a__ management responsibilities.
The general requirements fall into 3 categories:
A. The client must accept its responsibilities;
B. The accountant’s responsibilities must be limited; and
C. A written understanding must be established with the client.
-----------
A. Client Responsibilities
The first of the general requirements - the client and its management must agree to assume all management responsibilities.
31
A. Client Responsibilities
The first of the general requirements - the client and its management must agree to assume all management responsibilities.
Management responsibilities involve:
* L___ing and d_____ing an entity; and
* Making decisions regarding human, financial, and intangible resources, including their acquisition, use, control, and disposal.
Management responsibilities involve:
* Leading and directing an entity; and
* Making decisions regarding human, financial, and intangible resources, including their acquisition, use, control, and disposal.
32
A. Client Responsibilities
The first of the general requirements - the client and its management must agree to assume all management responsibilities.
Management responsibilities involve:
* Leading and directing an entity; and
* Making d_______s regarding human, financial, and intangible resources, including their acquisition, use, control, and disposal.
Management responsibilities involve:
* Leading and directing an entity; and
* Making decisions regarding human, financial, and intangible resources, including their acquisition, use, control, and disposal.
33
A. Client Responsibilities
The first of the general requirements - the client and its management must agree to assume all management responsibilities.
Management responsibilities involve:
* Leading and directing an entity; and
* Making decisions regarding human, financial, and i_______ resources, including their acquisition, use, control, and disposal.
Management responsibilities involve:
* Leading and directing an entity; and
* Making decisions regarding human, financial, and intangible resources, including their acquisition, use, control, and disposal.
34
A. Client Responsibilities
The first of the general requirements - the client and its management must a_____ to assume all management responsibilities.
Management responsibilities involve:
* Leading and directing an entity; and
* Making decisions regarding human, financial, and intangible resources, including their acquisition, use, control, and disposal.
The general requirements fall into 3 categories:
A. The client must accept its responsibilities;
B. The accountant’s responsibilities must be limited; and
C. A written understanding must be established with the client.
-----------
A. Client Responsibilities
The first of the general requirements - the client and its management must agree to assume all management responsibilities.
Management responsibilities involve:
* Leading and directing an entity; and
* Making decisions regarding human, financial, and intangible resources, including their acquisition, use, control, and disposal.
35
Examples of management responsibilities that the auditor may NOT assume include:
* Setting p____y or strategic direction for the client
* Directing, or taking responsibility for, the actions of client employees
* Authorizing, executing, or completing transactions, or having the authority to do so
Examples of management responsibilities that the auditor may NOT assume include:
* Setting policy or strategic direction for the client;
* Directing, or taking responsibility for, the actions of client employees;
* Authorizing, executing, or completing transactions, or having the authority to do so;
36
Examples of management responsibilities that the auditor may NOT assume include:
* Preparing source documents
* Having c______y of client assets
* Deciding upon which recommendations of the CPA or others should be implemented
Examples of management responsibilities that the auditor may NOT assume include:
* Preparing source documents;
* Having custody of client assets;
* Deciding upon which recommendations of the CPA or others should be implemented
37
Examples of management responsibilities that the auditor may NOT assume include:
* R_____ing to those charged with governance on behalf of management
* Serving as a stock transfer or escrow agent, registrar, general counsel, or in a similar role for an attest client
* Accepting responsibility for a client project
Examples of management responsibilities that the auditor may NOT assume include:
* Reporting to those charged with governance on behalf of management;
* Serving as a stock transfer or escrow agent, registrar, general counsel, or in a similar role for an attest client;
* Accepting responsibility for a client project;
38
Examples of management responsibilities that the auditor may NOT assume include:
* Accepting responsibility for the p________ and fair presentation of the entity’s financial statements in accordance with an applicable financial reporting framework
* Accepting responsibility for designing, implementing, or maintaining (DIM) internal control; and
* Performing monitoring procedures by evaluating internal controls on an ongoing basis.
Examples of management responsibilities that the auditor may NOT assume include:
* Accepting responsibility for the preparation and fair presentation of the entity’s financial statements in accordance with an applicable financial reporting framework (AFRF);
* Accepting responsibility for designing, implementing, or maintaining (DIM) internal control; and
* Performing monitoring procedures by evaluating internal controls on an ongoing basis.
39
Examples of management responsibilities that the auditor may NOT assume include:
• Setting p____y or s________c direction for the client
Examples of management responsibilities that the auditor may NOT assume include:
• Setting policy or strategic direction for the client;
40
Examples of management responsibilities that the auditor may NOT assume include:
• Directing, or taking r________y for, the actions of client employees;
Examples of management responsibilities that the auditor may NOT assume include:
• Directing, or taking responsibility for, the actions of client employees
41
Examples of management responsibilities that the auditor may NOT assume include:
• Authorizing, executing, or completing transactions, or having the a_______y to do so;
• Authorizing, executing, or completing transactions, or having the authority to do so
42
Examples of management responsibilities that the auditor may NOT assume include:
* Preparing source d_________
* Having custody of client a_____s
Examples of management responsibilities that the auditor may NOT assume include:
* Preparing source documents
* Having custody of client assets
43
Examples of management responsibilities that the auditor may NOT assume include:
• Deciding upon which recommendations of the CPA or others should be i_________ed
• Deciding upon which recommendations of the CPA or others should be implemented
44
Examples of management responsibilities that the auditor may NOT assume include:
• Reporting to those charged with governance on behalf of m___________
• Reporting to those charged with governance on behalf of management
45
Examples of management responsibilities that the auditor may NOT assume include:
• Serving as a stock transfer or escrow a____t, registrar, general counsel, or in a similar role for an attest client
• Serving as a stock transfer or escrow agent, registrar, general counsel, or in a similar role for an attest client
46
Examples of management responsibilities that the auditor may NOT assume include:
• Accepting r_________y for a client project
• Accepting responsibility for a client project
47
Examples of management responsibilities that the auditor may NOT assume include:
• Accepting r_________y for the preparation and fair presentation of the entity’s financial statements in accordance with an applicable financial reporting framework (AFRF)
• Accepting responsibility for the preparation and fair presentation of the entity’s financial statements in accordance with an applicable financial reporting framework (AFRF)
48
Examples of management responsibilities that the auditor may NOT assume include:
• Accepting responsibility for designing, implementing, or maintaining (DIM) i________ control
• Accepting responsibility for designing, implementing, or maintaining (DIM) internal control
49
Examples of management responsibilities that the auditor may NOT assume include:
• Performing monitoring procedures by evaluating i________ controls on an ongoing basis.
• Performing monitoring procedures by evaluating internal controls on an ongoing basis.
50
Examples of management responsibilities that the auditor may NOT assume include:
* Setting policy or strategic direction for the client
* Directing, or taking responsibility for, the actions of client employees
* Authorizing, executing, or completing transactions, or having the authority to do so
* Preparing source documents
* Having custody of client assets
* Deciding upon which recommendations of the CPA or others should be implemented
* Reporting to those charged with governance on behalf of management
* Serving as a stock transfer or escrow agent, registrar, general counsel, or in a similar role for an attest client
* Accepting responsibility for a client project
* Accepting responsibility for the preparation and fair presentation of the entity’s financial statements in accordance with an applicable financial reporting framework (AFRF)
* Accepting responsibility for designing, implementing, or maintaining (DIM) internal control
* Performing monitoring procedures by evaluating internal controls on an ongoing basis.
Examples of management responsibilities that the auditor may NOT assume include:
* Setting policy or strategic direction for the client;
* Directing, or taking responsibility for, the actions of client employees;
* Authorizing, executing, or completing transactions, or having the authority to do so;
* Preparing source documents;
* Having custody of client assets;
* Deciding upon which recommendations of the CPA or others should be implemented;
* Reporting to those charged with governance on behalf of management;
* Serving as a stock transfer or escrow agent, registrar, general counsel, or in a similar role for an attest client;
* Accepting responsibility for a client project;
* Accepting responsibility for the preparation and fair presentation of the entity’s financial statements in accordance with an applicable financial reporting framework (AFRF);
* Accepting responsibility for designing, implementing, or maintaining (DIM) internal control; and
* Performing monitoring procedures by evaluating internal controls on an ongoing basis.
51
Management must accept r_________y for oversight of the nonattest service being performed by the accountant for the client.
A. Client Responsibilities
Management must accept responsibility for oversight of the nonattest service being performed by the accountant for the client.
52
Management must accept responsibility for oversight of the non_____ service being performed by the accountant for the client.
A. Client Responsibilities
Management must accept responsibility for oversight of the nonattest service being performed by the accountant for the client.
53
Management must accept responsibility for oversight of the nonattest service being performed by the accountant for the client.
The client does this by designating an individual with appropriate s___, kn_______, and e________, preferably someone in senior management, to fulfill the role.
A. Client Responsibilities
Management must accept responsibility for oversight of the nonattest service being performed by the accountant for the client.
The client does this by designating an individual with appropriate skill, knowledge, and experience, preferably someone in senior management, to fulfill the role.
The party is not required to be able to perform the service but should have an adequate understanding to oversee it.
54
The client management "accept responsibility for oversight of the nonattest service being performed by the accountant for the client"
by designating an individual with appropriate skill, knowledge, and experience, preferably someone in senior management, to fulfill the role.
The party is not required to be able to perform the service but should have an adequate understanding to o______ it.
A. Client Responsibilities
Management must accept responsibility for oversight of the nonattest service being performed by the accountant for the client.
The client does this by designating an individual with appropriate skill, knowledge, and experience, preferably someone in senior management, to fulfill the role.
The party is not required to be able to perform the service but should have an adequate understanding to oversee it.
55
The client must also agree to e_______ the adequacy and results of the service performed and accept responsibility for the results of the service.
A. Client Responsibilities
The client must also agree to evaluate the adequacy and results of the service performed and accept responsibility for the results of the service.
56
The client must also agree to evaluate the adequacy and r_____s of the service performed and accept responsibility for the r_____s of the service.
A. Client Responsibilities
The client must also agree to evaluate the adequacy and results of the service performed and accept responsibility for the results of the service.
57
The client must also agree to evaluate the adequacy and results of the service performed and accept r_________y for the results of the service.
A. Client Responsibilities
The client must also agree to evaluate the adequacy and results of the service performed and accept responsibility for the results of the service.
58
In order to maintain independence, the accountant may not assume any m__________ responsibilities.
B. Limitation on Accountant’s Responsibilities
In order to maintain independence, the accountant may not assume any management responsibilities.
In addition, the accountant must be satisfied that the client will be able to meet the criteria it agrees to in the form of accepting all management responsibilities and the oversight and responsibility for the nonattest services being performed by the accountant on its behalf.
59
The accountant must be satisfied that the client will be able to meet the criteria it agrees to in the form of
accepting ___ management responsibilities
and the oversight and responsibility
for the nonattest services being performed by the accountant on its behalf.
B. Limitation on Accountant’s Responsibilities
In order to maintain independence, the accountant may not assume any management responsibilities.
In addition, the accountant must be satisfied that the client will be able to meet the criteria it agrees to in the form of
accepting ALL management responsibilities
and the oversight and responsibility
for the nonattest services being performed by the accountant on its behalf.
60
The accountant must be satisfied that the client will be able to meet the criteria it agrees to in the form of
accepting all management responsibilities
and the o________t and responsibility
for the nonattest services being performed by the accountant on its behalf.
B. Limitation on Accountant’s Responsibilities
In order to maintain independence, the accountant may not assume any management responsibilities.
In addition, the accountant must be satisfied that the client will be able to meet the criteria it agrees to in the form of
accepting ALL management responsibilities
and the oversight and responsibility
for the nonattest services being performed by the accountant on its behalf.
61
The accountant should also be satisfied that the client will:
• Make an informed j_______ in regard to the result of the service
B. Limitation on Accountant’s Responsibilities
The accountant should also be satisfied that the client will:
• Make an informed judgment in regard to the result of the service;
62
The accountant should also be satisfied that the client will:
• Accept responsibility for s_________t judgments and decisions for which it has responsibility.
B. Limitation on Accountant’s Responsibilities
The accountant should also be satisfied that the client will:
• Accept responsibility for significant judgments and decisions for which it has responsibility.
63
The accountant should also be satisfied that the client will:
* Make an informed judgment in regard to the r_____ of the service; and
* Accept responsibility for significant judgments and decisions for which it has r_________y.
B. Limitation on Accountant’s Responsibilities
The accountant should also be satisfied that the client will:
* Make an informed judgment in regard to the result of the service; and
* Accept responsibility for significant judgments and decisions for which it has responsibility.
64
In order to preserve independence, the accountant must enter into an und________ing with a client regarding the nonattest services to be performed.
C. Written Understanding
In order to preserve independence, the accountant must enter into an understanding with a client regarding the nonattest services to be performed.
The understanding is required to be in writing and is generally in the form of an engagement letter.
65
In order to preserve independence, the accountant must enter into an understanding with a client regarding the non_____ services to be performed.
The understanding is required to be in writing and is generally in the form of an e__________ letter.
C. Written Understanding
In order to preserve independence, the accountant must enter into an understanding with a client regarding the nonattest services to be performed.
The understanding is required to be in writing and is generally in the form of an engagement letter.
66
An engagement letter is required to include:
• The o_______s of the engagement
C. Written Understanding
An engagement letter is required to include:
• The objectives of the engagement
67
An engagement letter is required to include:
* The objectives of the engagement;
* The s_______s to be performed;
* The objectives of the engagement;
| * The services to be performed;
68
An engagement letter is required to include:
* The objectives of the engagement;
* The services to be performed;
* An ack___________ by the client that it is accepting its responsibilities;
* The objectives of the engagement;
* The services to be performed;
* An acknowledgement by the client that it is accepting its responsibilities;
69
An engagement letter is required to include:
* The objectives of the engagement;
* The services to be performed;
* An acknowledgement by the client that it is accepting its responsibilities;
* An indication of the CPA’s r__________es; and
* The objectives of the engagement;
* The services to be performed;
* An acknowledgement by the client that it is accepting its responsibilities;
* An indication of the CPA’s responsibilities; and
70
An engagement letter is required to include:
* The objectives of the engagement;
* The services to be performed;
* An acknowledgement by the client that it is accepting its responsibilities;
* An indication of the CPA’s responsibilities; and
* L________s on the engagement, if any.
C. Written Understanding
An engagement letter is required to include:
* The objectives of the engagement;
* The services to be performed;
* An acknowledgement by the client that it is accepting its responsibilities;
* An indication of the CPA’s responsibilities; and
* Limitations on the engagement, if any.
71
An e__________ letter is required to include:
* The objectives of the engagement;
* The services to be performed;
* An acknowledgement by the client that it is accepting its responsibilities;
* An indication of the CPA’s responsibilities; and
* Limitations on the engagement, if any.
C. Written Understanding
An engagement letter is required to include:
* The objectives of the engagement;
* The services to be performed;
* An acknowledgement by the client that it is accepting its responsibilities;
* An indication of the CPA’s responsibilities; and
* Limitations on the engagement, if any.
72
The AICPA Code of Professional Conduct has provided g______ for when the accountant is performing certain types of nonattest services.
```
These include:
• Advisory services
• Appraisal, valuation, and actuarial services
• Benefit plan administration
• Bookkeeping, payroll, and other disbursements
• Business risk consulting
• Corporate finance consulting
• Executive or employee recruiting
• Forensic accounting
• Information systems design, implementation, or integration
• Internal audit
• Investment advisory or management
• Tax services
• Attestation services
```
Nonattest Services that Do
or Do Not Impair Independence
Certain nonattest services, and certain conditions under which nonattest services are performed create threats to independence that cannot be reduced to an acceptable level.
The AICPA Code of Professional Conduct has provided guidance for when the accountant is performing certain types of nonattest services.
```
These include:
• Advisory services
• Appraisal, valuation, and actuarial services
• Benefit plan administration
• Bookkeeping, payroll, and other disbursements
• Business risk consulting
• Corporate finance consulting
• Executive or employee recruiting
• Forensic accounting
• Information systems design, implementation, or integration
• Internal audit
• Investment advisory or management
• Tax services
• Attestation services
```
73
When a CPA provides advisory services to a client, the management participation and self-review threats are affected.
These threats will be at an acceptable level, however, if the services are exclusively a_______y in nature and the accountant does not assume any m__________ responsibilities.
Advisory Services
When a CPA provides advisory services to a client, the management participation and self-review threats are affected.
These threats will be at an acceptable level, however, if the services are exclusively advisory in nature and the accountant does not assume any management responsibilities.
74
When a CPA provides advisory services to a client, the m_________ participation and s____ - _______ threats are affected.
Advisory Services
When a CPA provides advisory services to a client, the management participation and self-review threats are affected.
75
When a CPA provides advisory services to a client, the management participation and self-review threats are affected.
These threats will be at an acceptable level, however, if the services are ex_____ly a______y in nature and the accountant does not assume any management responsibilities.
Advisory Services
When a CPA provides advisory services to a client, the management participation and self-review threats are affected.
These threats will be at an acceptable level, however, if the services are exclusively advisory in nature and the accountant does not assume any management responsibilities.
76
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Provide a_______, resources for research, and make recommendations to management to assist it in performing its functions and making its decisions;
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Provide advice, resources for research, and make recommendations to management to assist it in performing its functions and making its decisions;
77
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Provide advice, r__________s for research, and make recommendations to management to assist it in performing its functions and making its decisions;
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Provide advice, resources for research, and make recommendations to management to assist it in performing its functions and making its decisions;
78
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Provide advice, resources for research, and make r______________s to management to assist it in performing its functions and making its decisions;
• Provide advice, resources for research, and make recommendations to management to assist it in performing its functions and making its decisions;
79
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Attend board meetings as an a______ with no voting rights;
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Attend board meetings as an advisor with no voting rights;
80
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Attend b____ meetings as an advisor with no voting rights;
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Attend board meetings as an advisor with no voting rights;
81
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Attend board meetings as an advisor with no v_____ rights;
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Attend board meetings as an advisor with no voting rights;
82
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Provide i____________s of financial statements, forecasts, or other analyses;
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Provide interpretations of financial statements, forecasts, or other analyses;
83
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Provide interpretations of financial statements, f______s, or other analyses; or
• Provide interpretations of financial statements, forecasts, or other analyses;
84
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Provide interpretations of financial statements, forecasts, or other a_______s;
• Provide interpretations of financial statements, forecasts, or other analyses;
85
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Provide interpretations of f________ statements, forecasts, or other analyses; or
• Provide interpretations of financial statements, forecasts, or other analyses; or
86
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• A_____ management regarding its anticipated plans, strategies, or relationships.
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Advise management regarding its anticipated plans, strategies, or relationships.
87
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Advise management regarding its anticipated plans, s________s, or relationships.
• Advise management regarding its anticipated plans, strategies, or relationships.
88
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Advise management regarding its anticipated p___s, strategies, or relationships.
• Advise management regarding its anticipated plans, strategies, or relationships.
89
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
• Advise management regarding its anticipated plans, strategies, or r__________s.
• Advise management regarding its anticipated plans, strategies, or relationships.
90
Advisory Services
Without raising t_____s to an unacceptable level, a CPA may:
* P_____ advice, resources for research, and make recommendations to management to assist it in performing its functions and making its decisions;
* A____ board meetings as an advisor with no voting rights;
* Provide interpretations of financial statements, forecasts, or other analyses; or
* Advise management regarding its anticipated plans, strategies, or relationships.
Advisory Services
Without raising threats to an unacceptable level, a CPA may:
* Provide advice, resources for research, and make recommendations to management to assist it in performing its functions and making its decisions;
* Attend board meetings as an advisor with no voting rights;
* Provide interpretations of financial statements, forecasts, or other analyses; or
* Advise management regarding its anticipated plans, strategies, or relationships.
91
When a CPA provides appraisal, valuation, and actuarial services, the m_________ p_________ and ____ - ______ threats are affected.
Appraisal, Valuation, and Actuarial Services
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
92
When a CPA p_____s appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
Appraisal, Valuation, and Actuarial Services
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
93
When a CPA provides a_______, valuation, and actuarial services, the management participation and self-review threats are affected.
Appraisal, Valuation, and Actuarial Services
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
94
When a CPA provides appraisal, v_______, and actuarial services, the management participation and self-review threats are affected.
Appraisal, Valuation, and Actuarial Services
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
95
When a CPA provides appraisal, valuation, and a_______ services, the management participation and self-review threats are affected.
Appraisal, Valuation, and Actuarial Services
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
96
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are a_____ed.
Appraisal, Valuation, and Actuarial Services
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
97
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
When these services both involve a s_________t degree of subjectivity and are m________ to the client’s financial statements,
threats would not be at an acceptable level and could not be reduced to an acceptable level by the application of safeguards.
Appraisal, Valuation, and Actuarial Services
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
When these services both involve a significant degree of subjectivity and are material to the client’s financial statements,
threats would not be at an acceptable level and could not be reduced to an acceptable level by the application of safeguards.
98
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
When these services both involve a significant degree of subjectivity and are material to the client’s financial statements,
threats would not be at an __________ level and could not be reduced to an __________ level by the application of safeguards.
Appraisal, Valuation, and Actuarial Services
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
When these services both involve a significant degree of subjectivity and are material to the client’s financial statements,
threats would not be at an acceptable level and could not be reduced to an acceptable level by the application of safeguards.
99
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
When these services both involve a significant degree of subjectivity and are material to the client’s financial statements,
threats would not be at an acceptable level and could not be reduced to an acceptable level by the application of ___________s.
Appraisal, Valuation, and Actuarial Services
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
When these services both involve a significant degree of subjectivity and are material to the client’s financial statements,
threats would not be at an acceptable level and could not be reduced to an acceptable level by the application of safeguards.
100
Appraisal, Valuation, and Actuarial Services
When these services both involve a significant degree of subjectivity and are material to the client’s financial statements,
either individually or in c_________ with other valuation, appraisal, or actuarial services,
threats would not be at an acceptable level and could not be reduced to an acceptable level by the application of safeguards.
Appraisal, Valuation, and Actuarial Services
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
When these services both involve a significant degree of subjectivity and are material to the client’s financial statements,
either individually or in combination with other valuation, appraisal, or actuarial services,
threats would not be at an acceptable level and could not be reduced to an acceptable level by the application of safeguards.
101
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
When these services both involve a significant degree of s________y and are material to the client’s financial statements,
either individually or in combination with other valuation, appraisal, or actuarial services,
threats would not be at an acceptable level and could not be reduced to an acceptable level by the application of safeguards.
Appraisal, Valuation, and Actuarial Services
When a CPA provides appraisal, valuation, and actuarial services, the management participation and self-review threats are affected.
When these services both involve a significant degree of subjectivity and are material to the client’s financial statements,
either individually or in combination with other valuation, appraisal, or actuarial services,
threats would not be at an acceptable level and could not be reduced to an acceptable level by the application of safeguards.
102
Valuations of ESOPs or business combinations, and appraisals of a____s or l_____s
generally require a significant degree of subjectivity
and impair independence
if the results are material to the client’s financial statements.
Appraisal, Valuation, and Actuarial Services
Valuations of ESOPs or business combinations, and appraisals of assets or liabilities
generally require a significant degree of subjectivity
and impair independence
if the results are material to the client’s financial statements.
103
Valuations of ESOPs or business combinations, and appraisals of assets or liabilities
generally require a s_________ degree of subjectivity
and impair independence
if the results are material to the client’s financial statements.
Appraisal, Valuation, and Actuarial Services
Valuations of ESOPs or business combinations, and appraisals of assets or liabilities
generally require a significant degree of subjectivity
and impair independence
if the results are material to the client’s financial statements.
104
Valuations of ESOPs or business combinations, and appraisals of assets or liabilities
generally require a significant degree of subjectivity
and impair independence
if the results are _________ to the client’s financial statements.
Appraisal, Valuation, and Actuarial Services
Valuations of ESOPs or business combinations, and appraisals of assets or liabilities
generally require a significant degree of subjectivity
and impair independence
if the results are material to the client’s financial statements.
105
An actuarial valuation of p______ or postemployment benefit liabilities
DO NOT generally require a significant degree of subjectivity
and would NOT raise threats to independence to an unacceptable level.
Appraisal, Valuation, and Actuarial Services
An actuarial valuation of pension or postemployment benefit liabilities
DO NOT generally require a significant degree of subjectivity
and would NOT raise threats to independence to an unacceptable level.
106
An actuarial valuation of pension or poste___________ benefit liabilities
DO NOT generally require a significant degree of subjectivity
and would NOT raise threats to independence to an unacceptable level.
Appraisal, Valuation, and Actuarial Services
An actuarial valuation of pension or postemployment benefit liabilities
DO NOT generally require a significant degree of subjectivity
and would NOT raise threats to independence to an unacceptable level.
107
An actuarial valuation of pension or postemployment benefit l_______s
DO NOT generally require a significant degree of subjectivity
and would NOT raise threats to independence to an unacceptable level.
Appraisal, Valuation, and Actuarial Services
An actuarial valuation of pension or postemployment benefit liabilities
DO NOT generally require a significant degree of subjectivity
and would NOT raise threats to independence to an unacceptable level.
108
An actuarial valuation of pension or postemployment benefit liabilities
DO NOT generally require a s_________ degree of subjectivity
and would NOT raise threats to independence to an unacceptable level.
Appraisal, Valuation, and Actuarial Services
An actuarial valuation of pension or postemployment benefit liabilities
DO NOT generally require a significant degree of subjectivity
and would NOT raise threats to independence to an unacceptable level.
109
An actuarial valuation of pension or postemployment benefit liabilities
DO NOT generally require a significant degree of s__________y
and would NOT raise threats to independence to an unacceptable level.
Appraisal, Valuation, and Actuarial Services
An actuarial valuation of pension or postemployment benefit liabilities
DO NOT generally require a significant degree of subjectivity
and would NOT raise threats to independence to an unacceptable level.
110
An actuarial valuation of pension or postemployment benefit liabilities
DO NOT generally require a significant degree of subjectivity
and would NOT raise threats to independence to an unacceptable level.
Appraisal, Valuation, and Actuarial Services
An actuarial valuation of pension or postemployment benefit liabilities
DO NOT generally require a significant degree of subjectivity
and would NOT raise threats to independence to an unacceptable level.
111
An actuarial valuation of pension or postemployment benefit liabilities
DO NOT generally require a significant degree of subjectivity
and would NOT raise threats to _____________ to an unacceptable level.
Appraisal, Valuation, and Actuarial Services
An actuarial valuation of pension or postemployment benefit liabilities
DO NOT generally require a significant degree of subjectivity
and would NOT raise threats to independence to an unacceptable level.
112
Appraisals, valuations, and actuarial services that are performed for nonfinancial statement purposes
would not raise threats to an unacceptable level.
Appraisal, Valuation, and Actuarial Services
Appraisals, valuations, and actuarial services that are performed for nonfinancial statement purposes
would not raise threats to an unacceptable level.
113
Appraisals, valuations, and actuarial services that are performed for non________ statement purposes
would not raise threats to an unacceptable level.
Appraisal, Valuation, and Actuarial Services
Appraisals, valuations, and actuarial services that are performed for nonfinancial statement purposes
would not raise threats to an unacceptable level.
114
Appraisals, valuations, and actuarial services that are performed for nonfinancial statement p_______s
would not raise threats to an unacceptable level.
Appraisal, Valuation, and Actuarial Services
Appraisals, valuations, and actuarial services that are performed for nonfinancial statement purposes
would not raise threats to an unacceptable level.
115
Appraisals, valuations, and actuarial services that are performed for nonfinancial statement purposes
would not raise threats to an __________ level.
Appraisal, Valuation, and Actuarial Services
Appraisals, valuations, and actuarial services that are performed for nonfinancial statement purposes
would not raise threats to an unacceptable level.
116
Valuations of ESOPs or business combinations, and appraisals of assets or liabilities generally require a significant degree of subjectivity and impair independence
if the results are _________ to the client’s financial statements.
An actuarial valuation of pension or postemployment benefit liabilities DO NOT generally require a significant degree of subjectivity and would NOT raise threats to independence to an unacceptable level.
In addition, appraisals, valuations, and actuarial services that are performed for NONfinancial statement purposes would NOT raise threats to an unacceptable level.
Appraisal, Valuation, and Actuarial Services
Valuations of ESOPs or business combinations, and appraisals of assets or liabilities generally require a significant degree of subjectivity and impair independence
if the results are MATERIAL to the client’s financial statements.
An actuarial valuation of pension or postemployment benefit liabilities DO NOT generally require a significant degree of subjectivity and would NOT raise threats to independence to an unacceptable level.
In addition, appraisals, valuations, and actuarial services that are performed for NONfinancial statement purposes would NOT raise threats to an unacceptable level.
117
Valuations of ESOPs or business combinations, and appraisals of assets or liabilities generally require a significant degree of ____________ and impair independence
if the results are MATERIAL to the client’s financial statements.
An actuarial valuation of PENSION or postemployment benefit liabilities DO NOT generally require a significant degree of subjectivity and would NOT raise threats to independence to an unacceptable level.
In addition, appraisals, valuations, and actuarial services that are performed for NONfinancial statement purposes would NOT raise threats to an unacceptable level.
Appraisal, Valuation, and Actuarial Services
Valuations of ESOPs or business combinations, and appraisals of assets or liabilities generally require a significant degree of SUBJECTIVITY and impair independence
if the results are MATERIAL to the client’s financial statements.
An actuarial valuation of PENSION or postemployment benefit liabilities DO NOT generally require a significant degree of subjectivity and would NOT raise threats to independence to an unacceptable level.
In addition, appraisals, valuations, and actuarial services that are performed for NONfinancial statement purposes would NOT raise threats to an unacceptable level.
118
When a CPA provides benefit plan a___________ services, the management participation and self-review threats are affected.
Benefit Plan Administration
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
119
When a CPA provides benefit plan administration services, the ___________ participation and ____ - _______ threats are affected.
Benefit Plan Administration
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Communicate summary plan information to a trustee of the plan;
120
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• C__________ summary plan information to a trustee of the plan;
Benefit Plan Administration
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Communicate summary plan information to a trustee of the plan;
121
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Communicate summary plan information to a t_____ of the plan;
Benefit Plan Administration
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Communicate summary plan information to a trustee of the plan;
122
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Communicate summary plan i__________ to a trustee of the plan;
Benefit Plan Administration
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Communicate summary plan information to a trustee of the plan;
123
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Provide management a_____ regarding the application and impact of provisions in a plan document;
Benefit Plan Administration
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Provide management advice regarding the application and impact of provisions in a plan document;
124
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Provide management advice regarding the application and impact of provisions in a plan d_________;
Benefit Plan Administration
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Provide management advice regarding the application and impact of provisions in a plan document;
125
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Provide management advice regarding the a___________ and impact of provisions in a plan document;
Benefit Plan Administration
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Provide management advice regarding the application and impact of provisions in a plan document;
126
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Provide management advice regarding the application and i______ of provisions in a plan document;
Benefit Plan Administration
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Provide management advice regarding the application and impact of provisions in a plan document;
127
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Process transactions initiated by plan participants or approved by a__________s,
Benefit Plan Administration
Without raising threats to an unacceptable level, however, a CPA may:
• Process transactions initiated by plan participants or approved by administrators,
128
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Process transactions initiated by plan p_________s or approved by administrators,
Benefit Plan Administration
Without raising threats to an unacceptable level, however, a CPA may:
• Process transactions initiated by plan participants or approved by administrators,
129
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Process t___________s initiated by plan participants or approved by administrators, such as
processing investment or benefit elections,
processing changes in contributions to the plan,
performing data entry,
preparing participant confirmations, and
processing distributions and loans;
Benefit Plan Administration
Without raising threats to an unacceptable level, however, a CPA may:
• Process transactions initiated by plan participants or approved by administrators, such as
processing investment or benefit elections,
processing changes in contributions to the plan,
performing data entry,
preparing participant confirmations, and
processing distributions and loans;
130
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• P______ transactions initiated by plan participants or approved by administrators, such as
p_____ing investment or benefit elections,
p_____ing changes in contributions to the plan,
performing data entry,
preparing participant confirmations, and
p_____ing distributions and loans;
Benefit Plan Administration
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Process transactions initiated by plan participants or approved by administrators, such as
processing investment or benefit elections,
processing changes in contributions to the plan,
performing data entry,
preparing participant confirmations, and
processing distributions and loans;
131
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Process transactions initiated by plan participants or approved by administrators, such as
processing i_________ or b______ elections,
processing changes in contributions to the plan,
performing data entry,
preparing participant confirmations, and
processing distributions and loans;
Benefit Plan Administration
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Process transactions initiated by plan participants or approved by administrators, such as
processing investment or benefit elections,
processing changes in contributions to the plan,
performing data entry,
preparing participant confirmations, and
processing distributions and loans;
132
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Process transactions initiated by plan participants or approved by administrators, such as
processing investment or benefit elections,
processing c_______s in c___________s to the plan,
performing data entry,
preparing participant confirmations, and
processing distributions and loans;
Benefit Plan Administration
Without raising threats to an unacceptable level, however, a CPA may:
• Process transactions initiated by plan participants or approved by administrators, such as
processing investment or benefit elections,
processing changes in contributions to the plan,
performing data entry,
preparing participant confirmations, and
processing distributions and loans;
133
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Process transactions initiated by plan participants or approved by administrators, such as
processing investment or benefit elections,
processing changes in contributions to the plan,
performing d____ entry,
preparing participant confirmations, and
processing distributions and loans;
Benefit Plan Administration
Without raising threats to an unacceptable level, however, a CPA may:
• Process transactions initiated by plan participants or approved by administrators, such as
processing investment or benefit elections,
processing changes in contributions to the plan,
performing data entry,
preparing participant confirmations, and
processing distributions and loans;
134
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Process transactions initiated by plan participants or approved by administrators, such as
processing investment or benefit elections,
processing changes in contributions to the plan,
performing data entry,
preparing participant confirmations, and
processing d________s and l___s;
Benefit Plan Administration
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Process transactions initiated by plan participants or approved by administrators, such as
processing investment or benefit elections,
processing changes in contributions to the plan,
performing data entry,
preparing participant confirmations, and
processing distributions and loans;
135
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Prepare account v_______s for plan participants;
Benefit Plan Administration
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Prepare account valuations for plan participants;
136
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Prepare account valuations for plan p________s;
Benefit Plan Administration
Without raising threats to an unacceptable level, however, a CPA may:
• Prepare account valuations for plan participants;
137
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• P_______ account valuations for plan participants;
Benefit Plan Administration
Without raising threats to an unacceptable level, however, a CPA may:
• Prepare account valuations for plan participants;
138
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Prepare and transmit p__________ statements.
Benefit Plan Administration
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Prepare and transmit participant statements.
139
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• P______ and transmit participant statements.
Benefit Plan Administration
Without raising threats to an unacceptable level, however, a CPA may:
• Prepare and transmit participant statements.
140
When a CPA provides b_____ plan a___________ services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* Communicate summary plan information to a trustee of the plan;
* Provide management advice regarding the application and impact of provisions in a plan document;
• Process transactions initiated by plan participants or approved by administrators such as
processing investment or benefit elections,
processing changes in contributions to the plan,
performing data entry,
preparing participant confirmations, and
processing distributions and loans;
* Prepare account valuations for plan participants; and
* Prepare and transmit participant statements.
Benefit Plan Administration
When a CPA provides benefit plan administration services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* Communicate summary plan information to a trustee of the plan;
* Provide management advice regarding the application and impact of provisions in a plan document;
• Process transactions initiated by plan participants or approved by administrators such as
processing investment or benefit elections,
processing changes in contributions to the plan,
performing data entry,
preparing participant confirmations, and
processing distributions and loans;
* Prepare account valuations for plan participants; and
* Prepare and transmit participant statements.
141
Threats would be raised to an unacceptable level and the accountant would not be able to reduce them to an acceptable level through the application of safeguards
if the accountant (Cannot do):
* Makes p_____ decisions for management;
* Interprets plan provisions for a participant without m__________ concurrence;
Benefit Plan Administration
Threats would be raised to an unacceptable level and the accountant would not be able to reduce them to an acceptable level through the application of safeguards
if the accountant (Cannot do):
* Makes policy decisions for management;
* Interprets plan provisions for a participant without management concurrence;
142
Threats would be raised to an unacceptable level and the accountant would not be able to reduce them to an acceptable level through the application of safeguards
if the accountant (Cannot do):
• Interprets plan provisions for a participant without management c__________;
Benefit Plan Administration
Threats would be raised to an unacceptable level and the accountant would not be able to reduce them to an acceptable level through the application of safeguards
if the accountant (Cannot do):
• Interprets plan provisions for a participant without management concurrence;
143
Threats would be raised to an unacceptable level and the accountant would not be able to reduce them to an acceptable level through the application of safeguards
if the accountant (Cannot do):
* D________s funds on behalf of the plan;
* Has c_____y of plan assets;
Benefit Plan Administration
if the accountant (Cannot do):
* Disburses funds on behalf of the plan;
* Has custody of plan assets;
144
Threats would be raised to an unacceptable level and the accountant would not be able to reduce them to an acceptable level through the application of safeguards
if the accountant (Cannot do):
• Serves in a f______y capacity, as defined in ERISA.
Benefit Plan Administration
if the accountant (Cannot do):
• Serves in a fiduciary capacity, as defined in ERISA.
145
Benefit Plan Administration
Threats would be raised to an ___________ level and the accountant would not be able to reduce them to an acceptable level through the application of safeguards
if the accountant (Cannot do):
* Makes policy decisions for management;
* Interprets plan provisions for a participant without management concurrence;
* Disburses funds on behalf of the plan;
* Has custody of plan assets; or
• Serves in a fiduciary capacity, as defined in ERISA.
Benefit Plan Administration
Threats would be raised to an unacceptable level and the accountant would not be able to reduce them to an acceptable level through the application of safeguards
if the accountant (Cannot do):
* Makes policy decisions for management;
* Interprets plan provisions for a participant without management concurrence;
* Disburses funds on behalf of the plan;
* Has custody of plan assets; or
• Serves in a fiduciary capacity, as defined in ERISA.
146
When a CPA provides bookkeeping, payroll and other disbursement services,
the ___________ _____________ and ____ - ______ threats are affected.
Bookkeeping, Payroll, and Other Disbursements
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
147
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Record transactions, for which the c_____ has approved or determined the account classification, in the client’s general ledger;
Bookkeeping, Payroll, and Other Disbursements
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Record transactions, for which the client has approved or determined the account classification, in the client’s general ledger;
148
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Record transactions, for which the client has approved or d_______ed the account classification, in the client’s general ledger;
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
• Record transactions, for which the client has approved or determined the account classification, in the client’s general ledger;
149
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Record transactions, for which the client has approved or determined the account c____________n, in the client’s general ledger;
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
• Record transactions, for which the client has approved or determined the account classification, in the client’s general ledger;
150
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Record transactions, for which the client has approved or determined the account classification, in the client’s g_______ _______;
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
• Record transactions, for which the client has approved or determined the account classification, in the client’s general ledger;
151
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• R______ transactions, for which the client has approved or determined the account classification, in the client’s general ledger;
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
• Record transactions, for which the client has approved or determined the account classification, in the client’s general ledger;
152
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Record __________s, for which the client has approved or determined the account classification, in the client’s general ledger;
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
• Record transactions, for which the client has approved or determined the account classification, in the client’s general ledger;
153
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* P____ transactions, coded by the client, to the client’s general ledger;
* P______ financial statements based on the client’s trial balance;
Bookkeeping, Payroll, and Other Disbursements
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* Post transactions, coded by the client, to the client’s general ledger;
* Prepare financial statements based on the client’s trial balance;
154
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* Post transactions, coded by the c____, to the client’s general ledger;
* Prepare financial statements based on the client’s t____ balance;
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
* Post transactions, coded by the client, to the client’s general ledger;
* Prepare financial statements based on the client’s trial balance;
155
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* Post transactions, c___ed by the client, to the client’s general ledger;
* Prepare financial statements b__ed on the client’s trial balance;
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
* Post transactions, coded by the client, to the client’s general ledger;
* Prepare financial statements based on the client’s trial balance;
156
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* P____ entries that have been approved by the client to the client’s trial balance;
* Propose entries or c____s to the financial statements that are reviewed by the client,
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
* Post entries that have been approved by the client to the client’s trial balance;
* Propose entries or changes to the financial statements that are reviewed by the client,
157
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Post entries that have been a______ed by the client to the client’s trial balance;
• P_____ entries or changes to the financial statements that are reviewed by the client,
provided the accountant is satisfied
that the nature and financial statement impact
are understood by the client, before posting;
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
• Post entries that have been approved by the client to the client’s trial balance;
• Propose entries or changes to the financial statements that are reviewed by the client,
provided the accountant is satisfied
that the nature and financial statement impact
are understood by the client, before posting;
158
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Post entries that have been approved by the client to the client’s trial balance;
• Propose entries or changes to the financial statements that are reviewed by the client,
provided the accountant is satisfied
that the nature and financial statement impact
are understood by the client, before posting;
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
• Post entries that have been approved by the client to the client’s trial balance;
• Propose entries or changes to the financial statements that are reviewed by the client,
provided the accountant is satisfied
that the nature and financial statement impact
are understood by the client, before posting;
159
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Post entries that have been approved by the client to the client’s t___ balance;
• Propose entries or changes to the financial statements that are reviewed by the client,
provided the accountant is satisfied
that the n____ and financial statement impact
are understood by the client, before posting;
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
• Post entries that have been approved by the client to the client’s trial balance;
• Propose entries or changes to the financial statements that are reviewed by the client,
provided the accountant is satisfied
that the nature and financial statement impact
are understood by the client, before posting;
160
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* Generate unsigned checks from information provided and a_____ed by the client;
* Process payroll for a client based on payroll records that have been provided and a______ed by the client;
Bookkeeping, Payroll, and Other Disbursements
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* Generate unsigned checks from information provided and approved by the client;
* Process payroll for a client based on payroll records that have been provided and approved by the client;
161
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* G_______ unsigned checks from information provided and approved by the client;
* P_____ payroll for a client based on payroll records that have been provided and approved by the client;
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
* Generate unsigned checks from information provided and approved by the client;
* Process payroll for a client based on payroll records that have been provided and approved by the client;
162
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* Generate unsigned checks from information provided and approved by the c_____;
* Process payroll for a client based on payroll records that have been provided and approved by the c_____;
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
* Generate unsigned checks from information provided and approved by the client;
* Process payroll for a client based on payroll records that have been provided and approved by the client;
163
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* Generate un____ed checks from information provided and approved by the client;
* Process p_____ for a client based on p_____ records that have been provided and approved by the client;
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
* Generate unsigned checks from information provided and approved by the client;
* Process payroll for a client based on payroll records that have been provided and approved by the client;
164
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* Generate unsigned c_____s from information provided and approved by the client;
* Process payroll for a client based on payroll records that have been p_____ed and approved by the client;
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
* Generate unsigned checks from information provided and approved by the client;
* Process payroll for a client based on payroll records that have been provided and approved by the client;
165
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• After client review and authorization, transmit payroll or other disbursement information to a bank, provided:
o P____ to transmission, the client has made arrangements to limit such payments as to amounts and payee;
Bookkeeping, Payroll, and Other Disbursements
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• After client review and authorization, transmit payroll or other disbursement information to a bank, provided:
o Prior to transmission, the client has made arrangements to limit such payments as to amounts and payee;
166
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• After client review and authorization, transmit payroll or other disbursement information to a bank, provided:
o Prior to transmission, the client has made arrangements to l____ such payments as to amounts and payee; and
o Once transmitted, the client has a________ed the bank to process the information; and
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
• After client review and authorization, transmit payroll or other disbursement information to a bank, provided:
o Prior to transmission, the client has made arrangements to limit such payments as to amounts and payee; and
o Once transmitted, the client has authorized the bank to process the information; and
167
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• After client r____ and a__________, transmit payroll or other disbursement information to a bank,
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
• After client review and authorization, transmit payroll or other disbursement information to a bank,
168
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• After client review and authorization, transmit payroll or other d___________ information to a bank,
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
• After client review and authorization, transmit payroll or other disbursement information to a bank,
169
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• After c____ review and authorization, transmit payroll or other disbursement information to a bank, provided:
o Prior to transmission, the c____ has made arrangements to limit such payments as to amounts and payee; and
o Once transmitted, the c____ has authorized the bank to process the information;
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
• After client review and authorization, transmit payroll or other disbursement information to a bank, provided:
o Prior to transmission, the client has made arrangements to limit such payments as to amounts and payee; and
o Once transmitted, the client has authorized the bank to process the information;
170
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• P_____ a bank, accounts receivable, or other reconciliation.
Bookkeeping, Payroll, and Other Disbursements
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Prepare a bank, accounts receivable, or other reconciliation.
171
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Prepare a bank, accounts receivable, or other r__________n.
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
• Prepare a bank, accounts receivable, or other reconciliation.
172
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Prepare a bank, accounts r________, or other reconciliation.
Bookkeeping, Payroll, and Other Disbursements
Without raising threats to an unacceptable level, however, a CPA may:
• Prepare a bank, accounts receivable, or other reconciliation.
173
Bookkeeping, Payroll, and Other Disbursements
When a CPA provides b________ing, p______ and other d__________ services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* Record transactions, for which the client has approved or determined the account classification, in the client’s general ledger;
* Post transactions, coded by the client, to the client’s general ledger;
* Prepare financial statements based on the client’s trial balance;
* Post entries that have been approved by the client to the client’s trial balance;
* Propose entries or changes to the financial statements that are reviewed by the client, provided the accountant is satisfied that the nature and financial statement impact are understood by the client, before posting;
* Generate unsigned checks from information provided and approved by the client;
* Process payroll for a client based on payroll records that have been provided and approved by the client;
• After client review and authorization, transmit payroll or other disbursement information to a bank, provided:
o Prior to transmission, the client has made arrangements to limit such payments as to amounts and payee; and
o Once transmitted, the client has authorized the bank to process the information; and
• Prepare a bank, accounts receivable, or other reconciliation.
Bookkeeping, Payroll, and Other Disbursements
When a CPA provides bookkeeping, payroll and other disbursement services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* Record transactions, for which the client has approved or determined the account classification, in the client’s general ledger;
* Post transactions, coded by the client, to the client’s general ledger;
* Prepare financial statements based on the client’s trial balance;
* Post entries that have been approved by the client to the client’s trial balance;
* Propose entries or changes to the financial statements that are reviewed by the client, provided the accountant is satisfied that the nature and financial statement impact are understood by the client, before posting;
* Generate unsigned checks from information provided and approved by the client;
* Process payroll for a client based on payroll records that have been provided and approved by the client;
• After client review and authorization, transmit payroll or other disbursement information to a bank, provided:
o Prior to transmission, the client has made arrangements to limit such payments as to amounts and payee; and
o Once transmitted, the client has authorized the bank to process the information; and
• Prepare a bank, accounts receivable, or other reconciliation.
174
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level and the accountant would not be able to reduce them to an acceptable level through the application of safeguards
if the accountant (Cannot do):
• Determines or changes, without prior a_______ from the client, journal entries, coding, classifications, or accounting records;
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level and the accountant would not be able to reduce them to an acceptable level through the application of safeguards
if the accountant (Cannot do):
• Determines or changes, without prior approval from the client, journal entries, coding, classifications, or accounting records;
175
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• Determines or changes, without prior approval from the c_____, journal entries, coding, classifications, or accounting records;
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• Determines or changes, without prior approval from the client, journal entries, coding, classifications, or accounting records;
176
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• D________s or changes, without prior approval from the client, journal entries, coding, classifications, or accounting records;
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• Determines or changes, without prior approval from the client, journal entries, coding, classifications, or accounting records;
177
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• A_________s or approves transactions;
• P_______s source documents,
such as purchase orders or invoices,
or makes changes to them without client approval;
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• Authorizes or approves transactions;
• Prepares source documents,
such as purchase orders or invoices,
or makes changes to them without client approval;
178
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• Authorizes or a_______s transactions;
• Prepares source d_________s,
such as purchase orders or invoices,
or makes changes to them without client approval;
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• Authorizes or approves transactions;
• Prepares source documents,
such as purchase orders or invoices,
or makes changes to them without client approval;
179
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• Authorizes or approves transactions;
• Prepares source documents,
such as purchase orders or invoices,
or makes changes to them without client a________;
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• Authorizes or approves transactions;
• Prepares source documents,
such as purchase orders or invoices,
or makes changes to them without client approval;
180
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• Accepts responsibility for authorizing client payments, other than certain electronic payroll tax payments provided certain requirements are complied with;
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• Accepts responsibility for authorizing client payments, other than certain electronic payroll tax payments provided certain requirements are complied with;
181
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• Accepts r_________y for authorizing client payments,
other than certain electronic payroll tax payments provided certain requirements are complied with;
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• Accepts responsibility for authorizing client payments,
other than certain electronic payroll tax payments provided certain requirements are complied with;
182
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• Accepts responsibility for a______ing client payments,
other than certain electronic payroll tax payments provided certain requirements are complied with;
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
• Accepts responsibility for authorizing client payments,
other than certain electronic payroll tax payments provided certain requirements are complied with;
183
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
* Accepts r__________y as a check signer;
* Has c_____y of client funds; or makes credit or banking decisions for the client; or
* A_______s invoices from vendors for payment.
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
* Accepts responsibility as a check signer;
* Has custody of client funds; or makes credit or banking decisions for the client; or
* Approves invoices from vendors for payment.
184
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
* Accepts responsibility as a check s_____;
* Has custody of client f____s; or makes credit or banking decisions for the client; or
* Approves i______s from vendors for payment.
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
* Accepts responsibility as a check signer;
* Has custody of client funds; or makes credit or banking decisions for the client; or
* Approves invoices from vendors for payment.
185
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
* A______s responsibility as a check signer;
* Has custody of client funds; or makes credit or banking d_______s for the client; or
* Approves invoices from vendors for p_______t.
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
* Accepts responsibility as a check signer;
* Has custody of client funds; or makes credit or banking decisions for the client; or
* Approves invoices from vendors for payment.
186
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an ___________ level if the accountant (Cannot do):
* Determines or changes, without prior approval from the client, journal entries, coding, classifications, or accounting records;
* Authorizes or approves transactions;
* Prepares source documents, such as purchase orders or invoices, or makes changes to them without client approval;
* Accepts responsibility for authorizing client payments, other than certain electronic payroll tax payments provided certain requirements are complied with;
* Accepts responsibility as a check signer;
* Has custody of client funds; or makes credit or banking decisions for the client; or
* Approves invoices from vendors for payment.
Bookkeeping, Payroll, and Other Disbursements
Threats would be raised to an unacceptable level if the accountant (Cannot do):
* Determines or changes, without prior approval from the client, journal entries, coding, classifications, or accounting records;
* Authorizes or approves transactions;
* Prepares source documents, such as purchase orders or invoices, or makes changes to them without client approval;
* Accepts responsibility for authorizing client payments, other than certain electronic payroll tax payments provided certain requirements are complied with;
* Accepts responsibility as a check signer;
* Has custody of client funds; or makes credit or banking decisions for the client; or
* Approves invoices from vendors for payment.
187
When a CPA provides business risk c______ing services, the management participation and self-review threats are affected.
Business Risk Consulting
When a CPA provides business risk consulting services, the management participation and self-review threats are affected.
188
When a CPA provides business risk consulting services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Assist m___________ in assessing its business risk control processes;
Business Risk Consulting
When a CPA provides business risk consulting services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Assist management in assessing its business risk control processes;
189
When a CPA provides business risk consulting services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Assist management in assessing its b______ risk control processes;
Business Risk Consulting
When a CPA provides business risk consulting services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Assist management in assessing its business risk control processes;
190
When a CPA provides business risk consulting services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Recommend, and assist in the i____________ of, improvements to the client’s business risk control processes.
Business Risk Consulting
When a CPA provides business risk consulting services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Recommend, and assist in the implementation of, improvements to the client’s business risk control processes.
191
When a CPA provides business risk consulting services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• R_________, and assist in the implementation of, improvements to the client’s business risk control processes.
Business Risk Consulting
When a CPA provides business risk consulting services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
• Recommend, and assist in the implementation of, improvements to the client’s business risk control processes.
192
When a CPA provides business risk consulting services, the management participation and self-review threats are affected.
Without raising threats to an ___________ level, however, a CPA may:
* Assist management in assessing its business risk control processes; or
* Recommend, and assist in the implementation of, improvements to the client’s business risk control processes.
Business Risk Consulting
When a CPA provides business risk consulting services, the management participation and self-review threats are affected.
Without raising threats to an unacceptable level, however, a CPA may:
* Assist management in assessing its business risk control processes; or
* Recommend, and assist in the implementation of, improvements to the client’s business risk control processes.
193
Business Risk Consulting
Threats would be raised to an unacceptable level and the accountant would not be able to reduce them to an acceptable level through the application of safeguards
if the accountant (Cannot do):
* Makes or a_________s business risk decisions; or
* P________s considerations of business risk to the board of directors on behalf of management.
Business Risk Consulting
Threats would be raised to an unacceptable level and the accountant would not be able to reduce them to an acceptable level through the application of safeguards
if the accountant (Cannot do):
* Makes or approves business risk decisions; or
* Presents considerations of business risk to the board of directors on behalf of management.
194
Business Risk Consulting
Threats would be raised to an unacceptable level and the accountant would not be able to reduce them to an acceptable level through the application of safeguards
if the accountant (Cannot do):
* Makes or approves business risk d________s; or
* Presents considerations of business risk to the board of directors on behalf of m___________.
Business Risk Consulting
Threats would be raised to an unacceptable level and the accountant would not be able to reduce them to an acceptable level through the application of safeguards
if the accountant (Cannot do):
* Makes or approves business risk decisions; or
* Presents considerations of business risk to the board of directors on behalf of management.
