Evidence Flashcards
AICPA Code of Conduct
Divided into 2 major sections: Principles and Rules
AICPA Princples
Consists of Responsibilities, Public Interest, Intergrity and Objectivity & Indepdendence, Due Care, Scope & Nature of Services
AICPA Rules
Rule 101 Independence Rule 102 Integrity and Objectivity Rule 202 Compliance with Standards Rule 203 Accounting Principles Rule 301 Confidential Client Information Rule 302 Contigent Fees Rule 501 Discreditable Acts Rule 502 Advertising Rule 503 Commissions and Referral Fees Rule 505 Form of Organization and Name
Rule 101 Independence
Impaired by ANY direct financial interests and any indirect material financial interests.
One year cooling off period if covered CPA leaves firm a client.
A firm may perform nonattest services for a client and still be independent as long as the firm does not serve or appear to serve as a member of a client’s management.
Not impaired by being a member of or an honorary truteee of a nonprofit charity, civic or religious group.
Can be associated to same trade association provide the member is not in a management capacity.
Rule 102 Intergrity and Objectivity
Conflict of interest may occur and is allowed to continue provided it is disclosed and client consent is obtained. Disclosure and consent eliminate the need for independence when it is required.
Rule 201 General Standards
Professional Competence, Professional Due Care, Planning and Supervision, and Sufficient Relevant Data are required.
Rule 202 Compliance with Standards
Some Standards to comply with:
SSARS ASB standards and PCAOB Management Consulting Services Executive Committee GASB standards Tax Executive Committee
Rule 203 Accounting Principles
Shall not express an opinion or state affirmatively or negatively that financial statements are presented in conformity with generally accepted accounting principles if there is any departure from GAAP
Rule 301 Confidential Client Info
Shall not disclose client information unless specific consent is given.
Exceptions to theory:
1) Member must disclose client information to comply with a suopeona
2) As part of a quality review of the member’s professional practices authorized by the AICPA
3) As part of an inquiry by the ethics board or trial board of the AICPA
Rule 302 Contingent Fees
Allowed in the following cases:
1) Permitted for compiliations of financial statements expected to be used by third parties provided non indepedence is disclosed.
2) Order by courts or other public authoritities or in tax matters.
Rule 501 Discreditale Acts
1) Failure to return records to a client
2) Determination by a court or adminstrative agency of discrrimination or harressment.
3) Failure to follow applicable standards or procedures in governmental audits unless the member disclosues that the standards or procedures in government audits unless the member discloses that the standards were not followed and the reasons for the noncompliance.
4) Negligance in preparing FS or records
5) Failure to follow GAAS and other standard of government agencies
6) Soliciatiation or disclosure of CPA exam questions.
7) Failure to timely file a timely personal or firm tax return
8) Failure to follow regulatory requirements
Rule 502 Advertising
Shall not seek to obtain clients by advertising or other forms of soliciation.
Rule 503 Comissions and Referral Fees
Member in public practice shall not receive a commission or refer to any client product when the member or member’s firm performs the following
1) Audit or review of financial stmts
2) Compiliation where lack of indepedence is not disclosed.
3) Examination of prospective financial information
