Chapter 4 - Professional Ethics

3 integrity n members should perform all

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3. Integrity: n Members should perform all responsibilities with integrity to maintain public confidence.
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+ Ethical Principles 4. Objectivity and Independence: n Members should be objective, independent, and free of conflicts of interest. 5. Due Care: n Members should observe the profession’s standards and strive to improve competence. 6. Scope and Nature of Services: n A member in public practice should observe the Code of Professional Conduct .
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+ Rules of Conduct n Section 100 Independence n Section 200 General Standards n Section 300 Responsibilities to Clients n Section 400 Responsibilities to Colleagues n Section 500 Other n See Summary of Rules on p. 102
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+ Independence n Independence in Appearance: n Financial Relationships n Any direct or material indirect financial interest in the client. n Managerial Relationships n Cannot work on an audit if you are a former employee for the client of the audit. n Auditor goes to work for a client in “key” position. n Non-Audit Services n AICPA interpretation n custody of client’s assets. n determining which audit recommendation to be implemented. n internal audit function.
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+ SOX and SEC Requirements for Independence § Prohibited Services § Bookkeeping and other accounting services § Financial information systems design and implementation § Appraisal or valuation services § Actuarial services § Internal audit outsourcing § Management of human resource functions § Broker, dealer, or investment adviser or investment banker services § Legal and expert services unrelated to the audit
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+ SOX and SEC Requirements n Audit Committee Requirements: n The Sarbanes-Oxley Act requires that all members of the audit committee be independent. n
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3 Integrity n Members should perform all responsibilities...

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