Ethics, Independence, Professional Responsibilities Flashcards
Unpaid fees for more than ___ Year before current years report impair independence
Unpaid fees for more than 1 year impair independence.
Acts discreditable to the profession
- Refusal to return client records
- Negligence in preparation of financial statements
- Illegal acts
- Solicitation or disclosure of CPA exam questions
What is SOX Act
Prohibits Officers and Directors form issuing misleading Fin Statements
If a CPA or CPA’s immediate family has direct or material indirect financial interest in a third party, Independence is impaired if _______
The third party or client has a material investment in and significant influence over the other.
SOX Title II: ______
Levels of requirement in auditing standards ____
Audit Independence for employee benefit plans are impaired by _______
Sox prohibits audit firms from auditing clients if any auditor begins working for the client in a financial reporting oversight role within one year.
Its like if i became controller for Krikey, FRCO couldnt audit Krikey for a year.
Sox requires audit and reviewing partners to rotate off engagements every ______ years
5 years
Sox Objectivity vs independence
List of independence and non attest services that impair or do not impair indp.
SOX prohibited non audit services
Auditor independence for EBPs.
Independence threats in Government auditing standards (edit this)
If a CPAs spouse or dependent receives a financial interest in an attest client through ESOP, it must be disposed of no later than _____ days after the right to do so is obtained,
30 days
Client records rules and examples
Supervising a client personnel or taking management responsibilities for a client ________ independence
Impairs independence.
Exceptions to sharing client confidential pbc.
Audit Committee functions ___
SOX Internal Controls, management vs auditors
Requirements to work at a former firms client.
Advisory services for nonissuers rules and examples
Requirements of due care
Contingent fees make the price of services dependent on their outcome. CPAs are prohibited to provide contingent fees for____?
- Tax returns/refund claims
- Audits, Reviews, Compilations
- Examinations of prospective Financial statements.
Which CPA services require independence?
In order to accept audit engagement, an independent audit must have __________
Additional requirements to GAAS for reports on GAGAS FS audits
Internal control, compliance
a plaintiff must prove all 5 elements to be successful in a negligence lawsuit against an accountant. What are the 5 elements.
Quality control elements for a CPA firm (HEAL-ME)
If the nature of a CPAs practice reveals confidential info, such as the CPA focuses on bankruptcy businesses, revealing the clients name might violate __________ under the AICPA code of professional conduct
Client confidentiality. A clients name is not usually confidential, but the nature of the CPA practice, bankruptcy, might imply confidential info so the name shouldn’t be disclosed.
GAAS and the PCAOB provide guidance for gathering sufficient appropriate evidence for an audit opinion, while the AICPA code of professional conduct sets forth ________
Quality control standards as safeguards to ensure quality audit performance
The SEC, members of an audit committee may receive compensation such as director fees,r etainers, and meeting fees for service on the board, but may not ________
- Accept any other consulting, advisory, or compensatory fee from the company
- Be affiliated with the company
Audit committee responsibilities
Bookkeeping services prohibited/permitted for nonissueers
Examples of absence of due care from a CPA
SOX nor the PCAOB prohibit the preparation of an audit clients original ________
tax return
MIPP vs MIB?
According to Title 1 of SOX, the SEC has oversight over _____
The PCAOB.
Auditors who are not covered members may not own more than ___% of a clients stock without impairing independence.
