AFA511 Final Exam.docx

AFA511 Final Exam.docx - CPA Code of Conduct Preamble This...

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CPA Code of Conduct Preamble This section introduces the CPA Code of Conduct by discussing the 5 fundamental principles of accepted conduct for all members and firms, which will be referenced throughout the Code. It also lists and describes the responsibilities that are present when providing professional services including the characteristics of the profession and fundamental principles governing conduct. The major discussion within the preamble is the five fundamental principles of accepted conduct provide the basis for rules in the CPA Code of Conduct that firms and members should follow. 1. Professional Behavior – how the CPA member should conduct themselves in their business practices 2. Integrity and Due Care – Members/firms should perform duties with integrity and due care 3. Objectivity – Members should remain objective while their professional judgment is not compromised 4. Professional Competence – CPAs continually develop their professional expertise 5. Confidentiality – Members protect confidential information and only disclose to certain authorities Definitions Certain key terms are discussed in this section to provide context and define terms that will be used throughout the Code of Conduct. Terms such as appropriate financial reporting, conflict of interest, generally accepted standards of practice of the profession and contingent fee. An example of a definition is “conflict of interest” which states an interest or relationship would be seen as a conflict of interest if it could influence a member or firm’s judgment or objectivity in the provision of the professional service. 100 – Professional Governance Professional governance describes the various rules related to a member/firm’s responsibilities of governance, such as compliance with governing legislation, bylaws, regulations and CPA code. The purpose of this section is to describe the various rules, consequences, procedures and circumstances to CPA members/firms related to professional governance.
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200 – Public Protection Public protection discusses the rules regarding the member/firm’s duties to protect the public. Many of the rules are discussed in the fundamental principles of conduct such as professional competence and integrity and due care. Professional competence is important for members and firms to have as without it, the public wouldn’t be able to place their trust in reliable auditors. Two major rules are discussed below – Rule 204 which discuss the rules related to independence and Rule 210 which discusses the rules related to conflict of interest. Rule 204 regarding independence describes the various definitions involving the independence of members and firms. Rule 204 also states guidance on the procedures and circumstances that could take place as part independence situations. Next guidance on effective date and transition provisions are provided. Specific rules that show the member/firm the regulations in place to maintain independence are discussed in detail. The
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  • Spring '17
  • International Financial Reporting Standards, professional services, Environmental Matters

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