ACC 4247 HW (5)

ACC 4247 HW (5) - Tony Chen 09/21/10 3) What is the basic...

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Tony Chen Chapter 3 09/21/10 3) What is the basic purpose of a code of ethics for a profession? The purpose of a professional code of ethics is to establish guidelines in creating a professional attitude and self manner that well improve discipline. 7) Explain how a CPA might have an indirect financial interest in an audit client. Does the AICPA Code of Professional Conduct prohibit such interest? There is indirect financial interest in an audit client when they have an investment with a third party who has interest in the client. An example would be an investment in a corporation with securities of the audit client. The Code of Professional Conduct only prohibits indirect financial interests when those interests in clients are material. 10) Sara Kole, CPA, has been requested by the president of Noyes Company, a closely held corporation and audit client, to cosign Noyes Company checks with the Noyes treasurer when the president is away on business trips. Would Kole violate the AICPA Code of Professional Conduct is she accepted this request? Signing checks is a management function. If Kole co-signed the check with the client, she would violate the Code of Professional Conduct’s rule dealing with independence. If Kole signs the check, she would not be independent during the periods she signs the checks. 11) With respect to ethics, what are the responsibilities of the Public Company Accounting Oversight Board? What is the source of the Board’s authority. The Public Company Accounting Oversight Board is responsible for developing independence standards
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ACC 4247 HW (5) - Tony Chen 09/21/10 3) What is the basic...

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