Discreditable Acts

Question 1

What are discreditable acts? Examples include:

Answer 1

Things we don’t want members to do

Examples: Discrimination and harassment in employment
Solicitation or disclosure of CPA Exam Questions & Answers

Failure to file a tax return or pay a tax liability, negligence in preparation of F/S or Records (carelessness),

material departure from audit standards, failure to follow government standards,

Improper use of indemnification and limitation of liability provisions,

disclosure of confidential information obtained from employment or volunteer activities

False advertising

Improper use of the CPA credential (don’t claim you’re a CPA if your not)

Removing client files or proprietary information from a firm after termination

Use of confidential information obtained from a prospective client or non client without consent

Question 2

Records Request (Important area):

Answer 2

Client and you get in a disagreement, client wants records back.

There are four categories of records:
1) Client-provided records: Records that the client brings you.

2) Member prepared records: Record’s you’ve prepared and they are not in the clients records (example: closing entries, adjusting entries, consolidating entries, supporting schedules, documents proposed)
3) Members work products: Deliverables you are to do as apart of the agreement
4) Work papers: Sampling, analysis,

Question 3

What is the AICPAs guidance on the property treatment of record requests by the client? 4 categories

Answer 3

1) Client-Provided Records: Return upon request
2) Member-Prepared Records: Deliver upon request WHEN related to a completed and issued work product, except they be withheld if fees are due for that specific work (can withhold if you haven’t been paid for those records)
3) Work Products: Provide upon request EXCEPT when you haven’t been paid for that specific work product or the work product is incomplete, or to comply with professional standards, or if there is threatened litigation concerning the engagement
4) Working Papers: Are the member’s property and need not be provided to the client

Question 4

Record Requests (important): How does record requests differ between states?

Answer 4

Sometimes state laws are more demanding of accountants, and those laws must be followed. Some laws might require you to provide the member records even if you haven’t been paid.

File a lawsuit instead. They breached the contract.

Question 5

How many days do you have to honor the request to return records?

Answer 5

45 days