I. Professional conduct standards in general
Evaluating whether a person has the necessary education to qualify to be an accountant;
Organizing and administering the accountant examination,
Licensing people that pass the exam.
Monitoring and disciplining of licensed accountants that do not comply with the rules and standards as set forth by the board.
Organize continuing educational programs for accountants under their jurisdiction.
The enforcement capabilities of the AICPA and state boards of accountancy include:
The AICPA may revoke or suspend a CPA’s membership but cannot terminate their accounting license
If there is a conflict in the between the codes of conduct of the AICPA and a state board of accountancy, the rules of the state boards of accountancy would supersede. This is so because state boards are the primary regulatory body of all accountants within a state. The AICPA is a voluntary professional organization for CPAs.
II. Independence and CPA engagements
A CPA is tasked with auditing a firm. The firm is originally from China and just recently set up a wholly owned subsidiary in the U.S. It has no U.S. customers, all its customers are Chinese. This is the first time the CPA heard of the firm or had any contact with them. In short, the auditor has independence of fact in that there are not connections between the firm and the auditor that might lead to a biased audit.
Same fact pattern as discussed above. The auditor also has independence of appearance because there are no connections that others might perceive would lead to a biased audit.
The independence of CPAs is not required in those engagements or under the circumstances in which the services that they perform do not require that they corroborate or validate the information, status, or data of a client.
III. Dealing with a mistake in an accounting firm
Although Mr. Chips probably could have ethically informed Right client that the return was delayed without expressing the exact details, his actions did not violate any provisions of the AICPA Code of Professional Conduct. In fact, under the code his actions were proper. He showed integrity by being honest and candid with the client even though that irritated the client. He also showed due care to follow the office ethical guidelines.
Ms. Barre’s actions or suggested actions could be found questionable under the AICPA Code of Professional Conduct. First, while the code does not specifically define integrity it does states that it is “measured in terms of right and just” (AICPA, 2014). Accordingly, informing a junior CPA that is was alright not only to lie to a client but also ignore the office’s ethical policy is questionable.
IV. The Fraud Triangle and other responsibilities
At times I have been tempted to commit occupational fraud by leaving work early or taking longer lunch breaks but signing in or out as if I left on time or got of break within the time period.
Opportunity: employees are responsible for their own sign in/sign out actions
Rationalization: everyone else does it at some point and it is not seen as a bad point if done only occasionally
Incentive: The pressure to always seem to be busy and dedicated to the job.
The primary responsibility for identifying occupational fraud is management. As the person must important to the overall operation of the company management must understand that effective administration includes finding ad fixing problems that deter the frim from achieving its goals. Management can work with auditors to help find occupational fraud but the primary responsibility remains with them. Auditors, on the other hand should have the primary responsibility in finding financial statement fraud. The reason for this is that this is an area of auditor expertise. Accordingly, they are in the best position to find it.
V. GAAS
The Auditing Standards Board (ASB) of the AICPA were originally tasked with establishing generally accepted auditing standards
Since the passage of the Sarbanes-Oxley Act of 2002, the Public Company Accounting Oversight Board is responsible for overseeing public companies.
3. The ASB is or remains in charge of GAAS for private companies.
Works Cited
American Institute of Certified Public Accountants (AIPCA). (2014). AICPA Code of Professional Conduct. Retrieved from http://www.aicpa.org/Research/Standards/CodeofConduct/DownloadableDocuments/2014December15ContentAsof2015April23CodeofConduct.pdf
