Chapter 4 reading - Chapter 4 Professional Ethics Ethics...

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Chapter 4 Professional Ethics Ethics – can be defined broadly as a set of moral principles or values. 2 reasons why people act unethically: 1. Ethical standards different then societies 2. Person chooses to act selfishly Auditors face many ethical dilemmas. Our society has associated a special meaning to the term professional. Professionals are expected to conduct them selves at higher rate than others in society. 1. Professional – responsibility for conduct that extends beyond satisfying individual responsibilities and beyond the requirements of our societies laws. Important for CPA’s to be professional, so people can believe in their work and increase public confidence. IN THE U.S THE AICPA CODE OF PROFESSIONAL CONDUCT IS SET TO PROVIDE A STANDARD CONDUCT FOR ALL MEMBERS OF THE CPA. CODE OF PROFESSIONAL CONDUCT AICPA code of professional conduct, provides both general and specific rules of conduct There are four parts to the code: 1. Principles 2. Rules of Conduct 3. Interpretations of the Rules of Conduct 4. Ethical Rulings Principles of Ethical Conduct: Include: Required by a CPA: 1. Responsibilities – carry them out as professionals, exercice professional and moral judgments.
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The Public Interest – accept obligation in a way to serve public interest 3. Integrity – perform with high integrity 4. Objectivity and Independence – free of conflict of interest. Auditor should be independent in fact and APPERANCE. 5. Due care – perform to the best of member ability 6. Scope and Nature of Services – look at code of professional conduct for scope and nature of services provided. Only in PUBLIC Accounting, and when providing attestation services such as auditing. Make sure your not violating independence. These are Ideal standards that should be followed. Not enforced. Rules of Conduct: This includes the explicit rules that MUST BE followed by every CPA in the country. MINIMUM requirements CPA’s must follow most, but not all rules of conduct. Because this is enforceable, it is reffered to as the Rules of Conduct. Interpretation of the Rules of Conduct: Not enforceable Ethical Rulings: Refer to specific factual circumstances Rules of conduct of the AICPA apply to all members for all the services provided, whether the member is practicing public accounting or not. Each rule applies to attestation services, and unless otherwise stated, it also applies to all services provided by CPA firms such as tax and management services. There are only 2 rules that EXEMPT certain nonattesation services: RULE 101 – independence. AICPA requires independence only for attestation services. RULE 203 – Accounting principles. This rule applies only to issuing an audit opinion or review service report on financial statements. INDEPENDENCE
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Chapter 4 reading - Chapter 4 Professional Ethics Ethics...

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