Unformatted text preview: is incomplete. Copyright © 2012 Gleim Publications, Inc., and/or Gleim Internet, Inc. All rights reserved. Duplication prohibited. www.gleim.com 18 SU 2: Professional Responsibilities 4) Supporting records contain information produced by the member that is not in
the client’s records, without which its financial information is incomplete.
b) 5) They are not otherwise available to the client.
Supporting records for an issued work product should be given to the
client upon request unless fees are due for that product.
The following summarizes the types of records and responsibilities:
Type Right to Withhold Client-provided records None Working papers Absolute barring legal or contractual exception Member-prepared client records If fees due or engagement incomplete
Supporting records 6)
7) If fees due or engagement incomplete Records also must be given to a client who suffered a loss because of an act of
war or natural disaster.
The member may
c) 8) Charge a reasonable fee,
Retain copies, and
Provide records in any format or usable form unless the engagement was
to prepare them in the requested format.
Compliance with a client’s request usually should be within 45 days.
EXAMPLES q q Individuals associated with a client may be involved in an internal dispute, and each may request records. A member
who has provided records to the designated client representative is not obligated to comply with requests for those
records by others associated with the client.
If the relationship of a member who is not an owner of a firm is terminated, (s)he may not take or retain originals or
copies from the firm’s client files or proprietary information without permission. c. Discrimination and Harassment
1) d. When a court or administrative agency has made a final determination that a
member has violated an antidiscrimination law, (s)he is deemed to have
committed an act discreditable.
Following the Requirements of Governmental Bodies
1) e. A member must follow GAAP and the requirements of governmental bodies
when preparing financial statements for entities subject to their jurisdiction.
2) If the member performs attest services, (s)he must follow the requirements of
those bodies as well as GAAS.
3) A material departure from the requirements is an act discreditable unless the
member discloses the reasons.
1) f. In a governmental audit, failure to adhere to applicable audit standards, guides,
procedures, statutes, rules, and regulations is an act discreditable to the
profession unless the report discloses the failure and the reasons for it.
1) Solicitation or knowing disclosure of CPA examination questions or answers is
an act discreditable. Copyright © 2012 Gleim Publications, Inc., and/or Gleim Internet, Inc. All rights reserved. Duplication prohibited. www.gleim.com 19 SU 2: Professional Responsibilities g. Negligence
1) It is an act discreditable to be responsible for negligently
c) h. Making materially false and misleading entries in the financial statements
Failing to correct materially false and misleading statements, or
Signing a document with materially false and misleading information. Failure to File a Tax Return or Pay Tax
1) i. Failing to comply with laws regarding (a) timely filing of personal or firm tax
returns or (b) timely payment of taxes collected for others is an act
Regulated Entities and Limitation of Liability
2. Regulators may prohibit regulated entities from entering into certain kinds of
indemnification and limitation of liability agreements in connection with
Regulators also may prohibit members from providing services under such
Failing to comply with such prohibitions is an act discreditable. Advertising and Other Forms of Solicitation – Rule 502
b. A member in public practice shall not seek to obtain clients by advertising or other
forms of solicitation done in a false, misleading, or deceptive manner.
Solicitation through coercion, overreaching, or harassing conduct is prohibited.
EXAMPLES q q A newsletter, tax booklet, etc., not prepared by the member may be attributed to the member if the member has a
reasonable basis to believe the information attributed to the member is not false, misleading, or deceptive.
The designation “Personal Financial Spets” may only be used on a letterhead when all partners or shareholders
have the AICPA-awarded designation. However, the individual members holding the designation may use it after
their names. c. False, Misleading, or Deceptive Acts
1) Such acts are prohibited because they are against the public interest. These
prohibited activities include the following:
c) d. Creating false expectations of favorable results
Implying the ability to influence any court, regulatory agency, etc.
Representing that specific services will be performed for a stated fee when
it is likely at the time that the fees will be substantially increased and the
client is not advised of the possibility
d) Other representations that would cause a reasonable person to
misunderstand or be deceived
Obtaining Clients Through Third Parties
2) Members are permitted to render services to clients of third parties.
If the third party obtained its clients through advertising, the members must
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This note was uploaded on 04/02/2013 for the course ACCT 7100 taught by Professor Swanson during the Spring '13 term at Valdosta State University .
- Spring '13