Professional Responsibilities Flashcards
The 6 Articlees of the Principles section of the AICPA Code of Professional Conduct
- Responsibilities
- The public interest
- integrity
- . Objectivity and indepndence
- due care
- scope and nature of services
A AICPA Code principle that is measured in terms of what is right and just and requires a member to observe principles of objectivity, indepndence and due care
Integrity
Level of indpendence necessary when providing auditing or attestation services
Independence in fact and appearance
A threat to independence that results from reviewing evidence that results from the member’s own work
Self-review threat
A type of indepndence threat that results from actions promoting the client’s interest or position
Advocacy threat
A threat to indepndence that results from actions or interests between teh member and the client that are in opposition (i.e. litiation between the client and the member)
Adverse interest threat
A threat to independence tha results from members having a close or longstanding relationship with the client or knowing individuals or entiteis who performed nonattest services for the client
Familiarity threat
A threat to indepndence that results from attempts by a client’s mamnagment to coernce the member or exercise excessive influence over the member
Undue influence threat
A threat to independence that results form a potential benefit to a member from a financial interset in, or some financial interest iwth, an attest client
Financial self-interest threat
A threat to independence that results from a member from assuming the role of managmeent or performing management functions for hte attest client
Management participation threat
AICPA rule stating that a member in public practice shall be independent in the performance of professional services as required by standards promulgated by designated bodes
Rule 101 Independence
An individual that would be considred a covered member because they evaluate the performance/recommend compensation of the attest engagement partner, directly supervies the partner, consults with the team, or oversees quality control
An individaul in a position to influence the attest engagement
Begins when a member either signs an initial engagement letter or other agreement to perform attest services, or to perform an attest engagment for a client (whichever is earlier) and ends with the formal or informal notification of hte termination of the professional relationship
Period of the professional engagement
A position in which an individual has primary responsibility for significatn accounting functions, for the preparation of hte financial statements, or has the ability to eercise influence over the contents of the financial statements
Key position
A parent, sibling, or nondepndent child
close relative
A spouse, spousal equivalent, or dependent (wheter or not related)
Immediate family
An ownership interest in an equity or a debt security that is directly owned by an individual or entity, under the control of the individual or entity, or is beneficially owned through nan investment vehicle
Direct financial interest
A registered public accounting firm must comply with these 2 sets of rules when auditing an issuer
PCAOB rules and standards and rules and regulations of SEC under federal securities laws
A tax transaction that is offered to a client under conditions of confidentiality and for which teh client pays the public accounting firm a fee
Confidential transaction–audit firm is not independent if perform this for an issuer audit client
Designated body for accoutning principles for businesses
FASB
Designated body for accounting principles for federal governmental entities
FASAB (Federal Accounting Standards Advisory Board)
Designated body for accounting principles for state and locla governmental entities
GASB (Governmental Accounting Standards Board)
Designated body for audidting, attestation, quality control, ethics, and independence statndards for companies covered by SOX
PCAOB
designated body for international accounting standards
IASB
Sources of GAAP
- FASB
- FASAB
- GASB
- IASB
An auditing service in which the practicioner expresses a conclusion about hte reliability of a written assertion that is the responsibility of another party
Attest services
An audit service in whichthe practioner develops the findings, conclusions and recommendations presented, generally only for the use and benefit of the client
Consulting services
A CPA holding out as a CPA while engaged in the performance of a consulting service for a client
Consulting services practioner
Professional services that employ the practicioner’s technical skills, education, observations, experiences, and knowledge of the consulting process
Consulting services
A type of sonsulting service that provides counsel in a short time frame, based mostly, if not entirely, on existing personal knowledge about hte client
Consultation
A stype of consulting service in which the CPA develops findings, conclusions, and recommendations for client consideration and decision making
Advisory services
A type of consulting service in which the CPA places an action plan into effect
Implementation services
A type of consulting service that provides services related to a specfic client transaction, generally with a third party
Transaction services
A consulting service that provides appropriate staff and possibly other support to perform tasks specified by the client
Staff and other support services
A type of consulting service that provides clients wtih a product and associated support services
Product services
Authoritative literature for consulting services
Statements on Standards for Consulting Services (SSCS)
Tbe authoritative body designed to promulgate attestation standards
Auditing Standards Board
Section of SOX that in essence led to CPA reporting on client internal control
Section 404
Section of SOX that makes it unlawful for any officer/director to take any action to fraudulently influence, coerce, manipulate, etc. any public accountat engaged in the performance of hte audit
Section 303
A standard-setting body withinthe International Federation o Accountants that issues ethical standards for accuntatns throughout the world; has 3 parts:
1. Part-A–applies to all professional accountnats
Part B–applies only to public practice
Part C–applies only to accountatns inb usiness
International Ethics Standards Board for Accountants (IESBA)
A worldwide organization of 160 national accounting bodies that debeloped the nternational auditing standards issued as a series of statements referred to as International Standards on Auditing
International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC)
Developed by the International Accounting Standards Board (IASB) to regulate international auditing standards and are generally more principle-based than GAAP, leaving room for more judgment
International Financial Reporting Standards (IFRS)
The prupose of this regulatory body is to protect investors, maintain fair, oderly, and efficient markets, and facilitate capital formation; has the auotirty to establish standards
Securities and Exchange Commission (SEC)
A regulatory body whose mission is to support Congress in meeting its constitutional responsibilites and to help improve the performance and sure hte accountability of hte federal government
Government Accountability Office (GAO)
Regulatory body whose mission is to foster and promote the welfare of job seekers, wage earners, and retirees of the United States
Department of labor
