SU 1 -Ethics and Professional Responsibilities Flashcards
Diligence
Presumed if the practitioner (A) relies upon the work product of another person and (B) uses reasonable care in engaging, supervising, training, and evaluating the person
-It must be exercised in preparing, and in assisting in preparing, approving, and filing returns, documents, and other papers related to IRS matters
Statements on Standards for Tax Services (SSTSs)
These are 7 services which are enforceable under the AICPA’s Code of Professional Conduct
- Tax Return Positions
- Answer to Questions on Returns
- Certain Procedural Aspects of Preparing Returns
- Use of Estimates
- Departure from a Position PReviously6 Concluded in an Administrative Proceeding or Court Decision
- Knowledge of Error: Return Preparation and Administrative Proceedings
- Form and Content of Advice to Clients
Signing tax return preparer
A person who has primary responsibility for the overall return or claim of refund
Nonsigning tax return preparer
An individual who prepares all or substantial portion of a return or claim for refund
Negligence
Any failure to make a reasonable attempt to (a) comply with the provisions of the IRC and laws (b) exercise ordinary and reasonable care in the preparation of a return.
Frivolous Submission
(1) omits information necessary to determine the TP tax liability (2) shows a substantially incorrect tax or willful understatement of tax liability (3) is based on a frivolous position (4) is based on the TP’s desire to impeded collection of tax
Professional Ethics Division
investigates ethics violation and imposes sanctions in less serious cases (Requiring and AICPA member to take additional CPE as a remedial measure)
Joint Trial Board
investigates serious infractions and have the power to admonish (censure), Suspend, or expel a member. It may also take whatever disciplinary action appropriate.
automatic expulsion
being kicked out of the AICPA for:
- Committing a felony
- Willfully failing to file a TR
- Filing a fraudulent TR on the member’s or client’s behalf
- Aiding in preparing a fraudulent TR for a client.
Joint Ethics Enforcement Program (JEEP)
AICPA division that handles matters of national concern, those involving 2 or more states, and those in litigation. Promotes formal cooperation between ethics committees of the AICPA an of the state societies.
Securities and Exchange Commission (SEC)
Provides future violations of the securities laws. Conducts administrative proceeds that are quasi-judicial
Public Company Accounting Oversight Board (PCAOB)
Created by SOX of 2002 to oversee auditor issues. Is watched by the SEC. Creates rules regarding QC, ethics, and auditing standards
