ACCT_3444_Chapters_3_and_4

ACCT_3444_Chapters_3_and_4 - Accounting 3444 Week 2 Chapter...

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Accounting 3444 Week 2 Chapter 3 Professional Relationships: The Role of Ethics and Independence Chapter 4, Legal Liability Week 1 Recap Impact of conflicting objectives Assurance vs Auditing Standards Assurance standards, unlike GAAS (CAS), have no requirement to understand the internal control structure. Assurance standards require training and proficiency in assurance engagements and knowledge of the subject matter. Definition of Auditing : Systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between the assertions and established criteria and communicating the results to interested users . GAAS presume knowledge of GAAP and require appropriate training. Three parties involved in an assurance engagement Users Conclusion Accountability Subject Matter Practitioner Accountable Party (Auditor) (Management) Review Homework Problems 2-28 and 2-31 Students present auditing topic HAND IN ASSIGNMENT 1 (see handout) and WEEKLY HW SUBMISSION Chapter 2 Wrap up In Class Question: Case 2-20 (Exercise and Take up) Chapter 3: Professional Relationships: The Role of Ethics and Independence 1
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Definition of ethics/professionalism Describe ethics and their relevance Theories of ethical behavior Ethical decision-making Rules of Professional Conduct o Identify key rules that apply to auditors Quality control systems – key elements and firm management/control over QCS Auditors have 3 key responsibilities to society: 1. Moral responsibilities – doing the “right” thing; based on social norms – everyone in society should adhere to 2. Professional responsibilities – rules and principles for proper conduct of a professional accountant performing his or her work. These standards are outlined in the Rules of Professional Conduct. 3. Legal responsibilities – accountants are liable for monetary damages and can be subject to criminal penalties (fines/jail terms) for failure to perform professional services properly. (Chapter 4). Ethics: a system or code of conduct based on moral duties and obligations that indicates how individuals should behave. 3 Key Elements: 1. Ethics involves questions requiring decision making/choices 2. Ethics involves guidelines of right and wrong 3. Ethics is concerned with considering consequences of decisions Ethical behavior – acting in a way that conforms to moral rules and principles Issue: moral rules and principles vary from family to family and from country to country. It is common for people to differ in their moral principles or values and the relative importance they attach to these principles. Influences over ones value system include parents, teachers, religious organizations and friends. Discussion Points:
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This note was uploaded on 07/13/2011 for the course ACCT 1110 taught by Professor Bleecker,d during the Spring '11 term at Kwantlen Polytechnic University.

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ACCT_3444_Chapters_3_and_4 - Accounting 3444 Week 2 Chapter...

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