CPAExcl 10-IFAC & Prof Respons.

Question 1

What is the role of the International Federation of Accountants’ (IFAC’s) Public Interest Oversight Board (PIOB)?

Answer 1

The PIOB provides oversight to ensure that IFAC’s standards, including auditing standards and ethical standards, are responsive to the public interest and to enhance investor confidence in these standards.

Question 2

What is the role of the International Federation of Accountants’ (IFAC’s) International Auditing and Assurance Standards Board (IAASB)?

Answer 2

1. In general, to be the global standard-setting body related to auditing, review, other assurance services, and quality control, and to facilitate convergence of national and international standards;
2. With respect to auditing specifically, to issue International Standards on Auditing (ISAs) applicable to the audit of historical financial information.

Question 3

List the four standard-setting boards of the International Federation of Accountants (IFAC).

Answer 3

1. The International Auditing and Assurance Standards Board (IAASB);
2. The International Ethics Standards Board for Accountants (IESBA);
3. The International Public Sector Accounting Standards Board (IPSASB); and
4. The International Accounting Education Standards Board (IAESB).

Question 4

Who can be members of the International Federation of Accountants (IFAC)?

Answer 4

Accounting organizations such as the AICPA can be members of IFAC, but individual accountants cannot be members.

Question 5

Who issues the International Financial Reporting Standards (IFRS)?

Answer 5

The International Accounting Standards Board (IASB), which is an independent accounting standard-setting body that is not affiliated with IFAC. IFAC is not an “accounting” standard-setting body.

Question 6

Describe the Public Interest article from the Principles of the Code of Professional Conduct.

Answer 6

Members should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism.

Question 7

List the services that can be performed by the auditor that do not require independence.

Answer 7

1. Compilation;
2. Tax;
3. Consulting services not banned by Sarbanes-Oxley.

Question 8

What level of professional conduct is established by the Code?

Answer 8

Minimum levels have been established.

Question 9

Describe the concept of due care as it relates to Principles of the Code of Professional Conduct.

Answer 9

A member should observe the profession’s technical and ethical standards, strive continually to improve competence and the quality of services, and discharge professional responsibility to the best of the member’s ability.

Question 10

Integrity requires the observance of what principles?

Answer 10

1. Objectivity;
2. Independence;
3. Due Care.

Question 11

List the features of objectivity.

Answer 11

1. Impartiality;
2. Intellectual honesty;
3. Freedom from conflicts of interest.

Question 12

Describe the objectivity and independence principles of integrity.

Answer 12

“A member should maintain objectivity and be free of conflicts of interest in discharging professional responsibilities. A member in public practice should be independent in fact and appearance when providing auditing and other attestation services.”

Question 13

Describe the Integrity article from the Principles of the Code of Professional Conduct.

Answer 13

“To maintain and broaden public confidence, members should perform all professional responsibilities with the highest sense of integrity.”

Question 14

Describe the Responsibilities article from the Principles of the Code of Professional Conduct.

Answer 14

In carrying out their responsibilities as professionals, members should exercise sensitive professional and moral judgments in all their activities.

Question 15

List the Articles of the Principles of the Code of Professional Conduct.

Answer 15

1. Responsibilities;
2. The Public Interest;
3. Integrity;
4. Objectivity and Independence;
5. Due Care;
6. Scope and Nature of Services.

Question 16

How should the scope and nature of services to be provided be determined in relationship to the Principles of the Code of Professional Conduct?

Answer 16

A member in public practice should observe the Principles of the Code of Professional Conduct in determining the scope and nature of services to be provided.