Chapter 4 - Chapter 4 Professional Ethics Note to students:...

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1 Chapter 4 Professional Ethics Note to students: This is a LONG chapter, with many rules and regulations on professional ethics. Although I do not think it’s fair to ask you to memorize all the rules, you do need to know some of the rules that are widely applied in the auditing profession. Table 4-1 provides a good summary of rules of conduct. I feel that you need to at least know this table fairly well for this chapter. 1. What Are Ethics? Your Task : Define “ethics”. Ethics – A set of ____________________________________________________ Why do people act unethically? 1. 2. 2. Ethical Dilemmas Your Task: Define “ethical dilemma”: Review Question 4-2 . How do people rationalize ethical dilemmas? 1. 2. 3. How do we resolve ethical dilemmas? – The six-step process: 1. 2. 3. 4. 5. 6. Review Question 4-1 3. Special Need for Ethical Conduct in Professions
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2 Why do people in general impose higher ethical standards among professionals? - - Why CPAs are encouraged to conduct themselves professionally? - - 4. Code of Professional Conduct What is “code of professional conduct”? a. Principles Ethical principles: (1) (2) (3) (4) (5) b. Rules of conduct What’s the difference between the standards of conduct set by the principles and those set by the rules of conduct ? c. Interpretation of rules of conduct d. Ethical rulings – what are they? Review Question 4-4, Problem 4-22. e. Applicability of the Rules of Conduct What is “Rule 101”, and what is “Rule 203” when we apply the rules of conduct? 5. Independence Your Task : 1. Differentiate “independence in fact” and “independence in appearance”. Review Question 4-5 2. Summarize SOX and SEC provisions addressing auditor independence. According to SOX and SEC provisions, which non-audit services to audit clients are prohibited?
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3 1. 2.
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This note was uploaded on 03/23/2011 for the course ACC 123 taught by Professor W during the Spring '11 term at Prince George's Community College, Largo.

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Chapter 4 - Chapter 4 Professional Ethics Note to students:...

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