Ethics Rules Flashcards
Members of public practice must follow which ethical standards
Integrity & Independence
Professional Competence & Due Care
Confidentiality
Contingent Fees
Discreditable Acts
Advertising & Soliciation
Referral Fees
Members in Business must follow which ethical standards
Integrity & Objectivity
Professional Competence & Due Care
Discreditable Acts
Other members must follow which ethical standards
Integrity & Objectivity
Discreditable Acts
What are covered members
Members that must maintain independence in an audit
1. Audit Team
2. All partnerns
3. Audit Firm
4. Employee benefit plans of audit firm
5. Firm members who provide 10+ hours of non-attest services
6. Immediate family of covered members (Spouse + dependents)
What is the time period of independence
Date of signing engagement letter until end of relationship termination
How do material and direct relationship impair independence
What changes were enacted by Sarbanes Oxley
C-Suite must sign off on financials
Independent audit commitee (manages internal and external auditors)
Integrated audit for issuers (added IFCR audits)
Which body oversees the auditing standards for public companies
PCAOB (PCAOB Rules and GAAS)
1. Quality control checks for auditing firms
2. Requires working papers to be retained for 7 years
3.Auditor independence (5 year rule)
Which body oversees the auditing standards for non-public companies
AICPA (Issues GAAS)
Can auditors of issuers provide any consulting services to them?
No, only tax services. Consulting is seen as a financial benefit that impairs independence
What is managements responsibily to an audit?
ICFR and effectiveness of ICFR
Filing 10k and 10Q
Independent audit comittee
No improper influence on conduct of audits
When the auditor identifies or suspects noncompliance with laws and regulations, the auditor should
When the auditor identifies or suspects noncompliance with laws and regulations, the auditor should obtain an understanding of the nature of the act; the circumstances in which it has occurred; and obtain further information to evaluate the possible effect on the financial statements.
