Rules of Professional Conduct

Question 1

Rules of professional conduct

Answer 1

maintain professions integrity and public confidence/trust

Question 2

The rules aim to

Answer 2

1) protect the public
2) achieve orderly conduct within profession

Question 3

Public trust committee

Answer 3

oversees ethical standards of CPA

Question 4

5 key principals

Answer 4

1) objectivity (independent and objective state)
2) integrity (act with integrity and due care)
3) professional competence (maintain knowledge/skills and do not take work not competent in)
4) confidentiality (respect to client affairs and business)
5) professional behavior (professional to maintain reputation)

Question 5

Fees

Answer 5

• before providing quote you must know what the work entails
• billings should not be significantly less than predecessor accountant

Question 6

Advertising

Answer 6

• do not involve with poor manner advertising and do not promote false/misleading advertising

Question 7

Predecessor practitioner

Answer 7

• must be contacted before accepting the engagement

Question 8

Independence

Answer 8

practioner ability to act with objectivity, integrity and professional skepticism
- need to have independence in fact and in appearance
- independence in fact: actual independence, to maintain unbiased opinion
- independence in appearance: act in a way to prove you are independent and perceived as independent

Question 9

Threats to independence

Answer 9

• self interest threats (practitioner has financial interest)
• self review threats (form opinion on own work)
• advocacy threats (perceived to promote client)
• familiarity threats (close relationship with client)
• intimidation threat (client intimidates practitioner)

Question 10

Safe guards to reduce independence threats

Answer 10

• professional safeguard (CPA training on independence)
• client safeguards (audit committee)
• practioner safeguards (procedures such as partner rotation policy)