AICPA Final Exam WITH 100% CORRECT ANSWERS

4 parts Ethical principles Rules of conduct Interpretations Ethical rulings Ethical principles Ideal standards of ethical conduct stated in philosophical terms: Responsibilities The public interest Integrity Objectivity and independence Due care Scope and nature of services Though not enforceable, the burden of proof on CPA for noncompliance rules of conduct (100-500) Minimum standards of ethical conduct stated as specific rules These are enforceable Other organizations' rules of conduct can be less or more restrictive than AICPA's: SEC TSBPA For frequent, recurrent questions about a specific rule of conduct Though not enforceable, a CPA must justify departure Prepared by AICPA Division of Professional Ethics ethical rulings Explanations to specific important questions about rules of conduct Based on questions submitted to AICPA by practitioners Not enforceable, but a CPA must justify departure What Should You Do When AICPA Rules of Conduct Differ from SEC, TSBPA? Follow whichever is more restrictive If you're not sure about an ethics issue, call the TSBPA AICPA Also Recently Adopted a "Covered Person" Independence Perspective Previous AICPA rules took a "firm wide" Independence perspective Intended to modernize rules for auditor independence regarding: Investments in audit clients Employment relationships Scope of services provided to SEC clients Old rules were out of date and unnecessarily restrictive, given increasing numbers of dual income families Firm wide perspective: Partners could not own any stock in any client company Managers and below could not own stock of the client if they were in the office doing the audit for the client For example: Joe Abston, manager in Honolulu office, transferred to Dallas office and had to sell Dr Pepper