Ethics and Professional Responsibilities

Question 1

Who is considered a tax preparer?

Answer 1

If compensation received, including nonmonetary

Question 2

What are AICPA Statements on Standards for Tax Services?

Answer 2

TS 100 - Tax Return Positions
TS 200 - Answers to Questions on Returns
TS 300 - Certain Procedural Aspects of Preparing Returns
TS 400 - Use of Estimates
TS 500 - Departure from a Position Previously Concluded in Admin Proceeding
TS 600 - Knowledge of Error
TS 700 - Form and Content of Advice to Taxpayers

Question 3

What is Treasury Circular 230?

Answer 3

Set of US Treasury regulations that govern practice before IRS
Affects attorneys, CPAs, EAs, enrolled retirement plan agents

Question 4

Who may practice under Circular 230?

Answer 4

CPA must not be currently under suspension
Must file declaration with IRS saying CPA is qualified to represent party
CPA not currently under suspension can provide written advice without filing declaration

Question 5

What should CPA do under Circular 230 when records requested from IRS are not in CPA’s possession?

Answer 5

Notify IRS
Ask client who has records
Do not obtain records from client to send to IRS

Question 6

When can a contingent fee by charged under Circular 230?

Answer 6

Challenge to original return, amended return, or claim for refund
Not filing/preparing original return or amended return

Question 7

How can CPA send information about fees under Circular 230?

Answer 7

Professional lists
Telephone directories
Print media
E-mail
Flyers
Radio 
TV

Question 8

What is the Private Securities Litigation Reform Act of 1995?

Answer 8

CPA must do the following during an audit of public company:
RIG:
Related party transactions - identify
Illegal acts - identify
Going concern - determine if company will continue for one year

Question 9

What should CPA do if discovers illegal acts?

Answer 9

Report to management
If management does not act, must inform board of directors or audit committee
Board is given 1 business day to making filing with SEC and provide proof to auditor
If do not receive, CPA has 1 business day to either resign or notify SEC

Question 10

What are the exceptions to confidentiality regarding work papers?

Answer 10

Valid subpoena
IRS subpoena
Court order
When disclosure is necessary for GAAP or GAAS
Quality control peer review