Rules of Professional Conduct Flashcards
What is the objective of the rules of professional conduct?
help maintain the profession’s integrity as well as the confidence and trust of the public. The rules aim first to protect the public and second to achieve orderly and courteous conduct within the profession.
What are the rules of professional conduct?
ethical and independence requirements for practitioners who conduct financial statement audits or reviews are set out through rules (or a code) of professional conduct
What are the 5 principles of rules of conduct
Objectivity: maintain an independent and objective state of min
Integrity and due care: act with integrity and due care in the performance of their professional activities.
Professional competence: maintain their knowledge and skill at a level required by the professional bodies and not undertake work for which they lack the necessary competence.
Confidentiality: maintain confidentiality with respect to the affairs and the business of the client.
Professional behavior: behave in a professional way that maintains the good reputation of the profession and serves the public interest
What are the rules relating to fees
Should not be contingent
Should not be significantly lower than prev or competitors
Should be reasonable for services provided
What are the rules relating to advertising?
CPA Canada members should not engage in false or misleading advertising or make unsubstantiated claims, nor should they solicit any professional engagement in a manner that is persistent, coercive, or harassing.
What are the categories of independence threats?
Self-interest threats occur where the practitioner (or his or her firm) has a financial interest in the client
Self-review threats occur where the practitioner is in the position of having to form an opinion on his or her own work
Advocacy threats occur where the practitioner is perceived to promote, or actually promotes, the position of the client
Familiarity threats occur where a close relationship exists between the practitioner and the client, creating an environment where it is difficult for the practitioner to behave with professional skepticism
Intimidation threats occur where the client intimidates the practitioner (or his or her firm), as in the following examples:
What is the responsibility of the practitioner, if independence threats are identified?
It is also the responsibility of the practitioner to implement safeguards to eliminate these threats or to reduce these threats to an acceptable level if any identified.
If unable to reduce to acceptable levels, the engagement should be declined
How can the threats be reduced or eliminated?
Through the implementation or utilization of safeguards,
What is the responsibility of the practitioner to reach out to prev. auditor?
must ask the predecessor if there is any reason that the firm should not accept the engagement.
The predecessor is required to respond promptly to inquiries of this nature.
W/o client permission for additional info, the predecessor will be limited to a yes-or-no answer
