AUD 2 Professional Responsibilities and Ethics 3 Flashcards
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.
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.
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.
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.
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;
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;
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.
• The financial statements for the period during which the nonattest services were performed were attested to by another CPA.
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.
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.
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.
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.
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.
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.
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
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
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.
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.
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
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.
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.
- 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.
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.
- 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
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.
- The CPA will apply the three general requirements for performing nonattest services enumerated in the Code.
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.
- 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.
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.
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.
- 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.
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.
- 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.
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.
- 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.
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.
- 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.
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.
- 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.
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.
- Cumulative Effect of Multiple Nonattest Services
• The management participation threat
is the threat that the CPA will assume __________ ___________ies.
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.
- 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.
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.
The 3 general requirements for performing nonattest services for an attest client are designed to reduce the ____ - ________ and ___________ participation threats to an acceptable level.
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.
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.
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.
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.
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.
- 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
- 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.
- 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.
- 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.
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.
- 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.
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.
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.
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.
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.
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.
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.
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;
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
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;
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.
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;
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
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
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
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
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
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
Examples of management responsibilities that the auditor may NOT assume include:
• Accepting r_________y for a client project
• Accepting responsibility for a client project
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)
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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;
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.
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.
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.
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.
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
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;
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;
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
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.
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.
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
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.
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.
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.
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;
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;
