Ch. 4 Rules of Professional Conduct Flashcards
What are the 5 key principles of our Professional Code of Conduct?
Objectivity, integrity, professional competence, confidentiality, and professional behaviour
What are the rules in regards to fee and fee quotations?
We just obtain information before providing a quote, and it should not be significantly lower than last years or quoted by others. Contingent fees are also prohibited when a member’s professional judgement or objectivity is compromised
What are the rules surrounding advertising?
We are not allowed to engage in false or misleading advertising or to make unsubstantiated claims
What do you need to do when accepting a new engagement?
We need to reach out to the predecessor practitioner and ask whether or not we should accept the engagement and if there is a reason to it (yes or no answer)
What does it mean to be independent?
It means to act with objectivity, integrity, and professional skepticism
What are the two types of independence that are required of us?
Independence in fact, and independence in appearance.
What are the different threats to a practitioner’s independence
Self-interest threats, self-review threats, advocacy threats, familiarity threats, intimidation threats
What are self-interest threats
When they have a financial interest in the client either through immediate family, or if the client’s fees are significant, or if a loan is made by a client.
What are self-review threats?
when we are in a position to form an opinion of their work and we are the ones to provide assurance over these services
What are advocacy threats?
When we help promote the client (perceived or actually do it)
What are familiarity threats?
When a close relationship exists between the practitioner and the client, where it makes it difficult to uphold professional skepticism
What are intimidation threats?
when the client intimidates the practitioner – either threatening to replace them or pressuring to reduce the hours of an audit.
What are some safeguards we can turn to?
Education and training programs by CPA, the client’s audit committee, and firm policies and procedures to ensure the quality of the firm’s service and compliance with independence.
