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
