132CHAPTER 3

132CHAPTER 3 - PROFESSIONAL ETHICS CHAPTER EATING TIME This...

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1 Bob Anderson, UCSB CHAPTER 3-1 PROFESSIONAL ETHICS 3 CHAPTER Bob Anderson, UCSB Intro & Chapter 3-2 EATING TIME This is the first ethical dilemma you will be faced with, so lets discuss it. ± Short term benefit to you ± Long term impact to the engagement ± Impairs business decisions ± Is dishonest Bob Anderson, UCSB Intro & Chapter 3-3 AICPA Professional Ethics Principles (Provide Overall Framework) Rules (Govern Performance of Professional Services) Interpretations (Provide Guidelines as to the Scope and Application of Rules) Ethics Rulings (Summarize Application of Rules and Interpretations to Particular Factual Circumstances) Code of Professional Conduct Additional Guidance Goal-oriented Enforceable specific rules- next slide AICPA Issues AICPA Issues Bob Anderson, UCSB Intro & Chapter 3-4 CODE OF PROFESSIONAL CONDUCT- PRINCIPLES Membership in the AICPA is voluntary, however once a member, or when performing a service in accordance with it’s guidance, must comply with code of prof. Conduct. I. Responsibilities: exercise sensitive and professional judgments II. Act in a way which will serve the public interest , honor public trust…professionalism III. Maintain and broaden public confidence by performance with highest of integrity . IV. Maintain Objectivity and Independence V. Exercise Due Care in discharge of responsibilities VI. Observe these Principles in determining the scope and nature of services to be provided.
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2 Bob Anderson, UCSB Intro & Chapter 3-5 The Rules of the AICPA Code of Professional Conduct Rule Title ± 101 Independence ± 102 Integrity and Objectivity ± 201 General Standards ± 202 Compliance with Standards ± 203 Accounting Principles ± 301 Confidential Client Information ± 302 Contingent Fees ± 501 Acts Discreditable ± 502 Advertising and Other Forms of Solicitation ± 503 Commissions and Referral Fees ± 504 (Deleted) ± 505 Form of Organization and Name Bob Anderson, UCSB Intro & Chapter 3-6 Independence ± Appearance ± Fact ± Rules have to be based on appearance because fact or objectivity is difficult to enforce. What a CPA may consider to not impair her independence may be viewed otherwise by a person relying upon their report. Therefore “Appearance” is an important factor. Bob Anderson, UCSB Intro & Chapter 3-7 Covered Members “COVERED” MEMBERS ARE SUBJECT TO THE MOST STRINGENT INDEPENDENCE REQUIREMENTS ± Staff working on the attest engagement ± An individual who may influence the attest engagement ± A partner in the office in which the partner in charge of the attest engagement primarily practices ± Partners or managers that provide a specified amount of non-attest services to client ± The public accounting firm and its employee benefit plan ± Any entity controlled by one or more of the above Bob Anderson, UCSB Intro & Chapter 3-8 Independence Rule—Interpretation 101-1 Section Applies to: A. Has direct or material indirect financial
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132CHAPTER 3 - PROFESSIONAL ETHICS CHAPTER EATING TIME This...

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