Chapter 19 Review Questions
What are the two major sections of the AICPA code of professional conduct?
- Principles of Professional Conduct(setting forth ideal attitudes and behaviors) - Rules of Conduct(defining mini un standards)
What types of personal loans from a financial institution are allowed by the Rules of Conduct?
-Automobile loans and leases collateralized by the automobile. -Loans fully collateralized by the cash surrender value of an insurance policy. Continue...
What are the five major sections of the Rules of Conduct?
-Independence, Integrity, and Objectivity. -General Standards and Accounting Principles. -Responsibilities to Clients -Responsibilities to Colleagues -Other Responsibilities and Practices
What additional guidance is provided for applying the Rules of Conduct?
-Interpretations of Rules of Conduct -Rulings by the Professional Ethics Committee(PEEC)
What types of personal loans from a financial institution are allowed by the Rules of Conduct?
-Loans fully collateralized by cash deposits at the same financial institution. -Credit Cards and cash advances on checking accounts where the aggregate outstanding balance is reduced to $10000 or less by the payment due date.
Rule 301 specifies 5 situations when a CPA can disclose and performance requirements under without the client's consent:
1) to meet disclosure and performance requirements under GAAP and GAAS 2) to comply with a valid subpoena 3) to allow a review of a member's professional practice under the practice under the authority of the AICPA, a state CPA society, or a state board of accountancy.
Rule 301 specifies 5 situations when a CPA can disclose and performance requirements under without the client's consent:
4) to comply with an investigative or disciplinary proceeding 5) to allow a review of a CPA's professional practice in conjunction with the purchase, sale, or merger of the practice.
Scope and nature of services:
A member in public practice should observe the Principles of the Code of Professional Conduct in determining the scope and nature of services to be provided.
Objectivity and independence:
A member should maintain objectivity and be free of conflicts of interest in discharging professional responsibilities. A member in public practice should be independent in fact and appearance when providing auditing and other attestation services
Due care:
A member should observe the profession's technical and ethical standards, strive continually to improve competence and the quality of services, and discharge professional responsibility to the best of the member's ability.
What is meant by normal lending procedures, terms, and requirements within the context?
Are defining as lending procedures, terms, and requirements that are reasonably to those relating to loans of a similar character given to other borrowers during the period in which the loan to the member is given.
Responsibilities
In carrying out their responsibilities as professionals, members should exercise sensitive professional and moral judgements in all their activities
The public interest
Members should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism.
What are the six Principles of Professional Conduct?
Responsibilities The Public interest Integrity Objectivity and Independence Due care Scope and Nature of services
Integrity
To maintain and broaden public confidence, members should perform all professional responsibilities with the highest sense of integrity.
