AICPA Code of Professional Conduct

These flashcards cover key concepts from the AICPA Code of Professional Conduct, including professional judgment, independence threats, ethical conflicts, safeguards, and relevant standards.

The AICPA Code of Professional Conduct emphasizes __________ and __________ for CPAs in their professional judgments.

objectivity and independence

The KPMG Framework comprises key components such as clarifying issues and objectives, considering __________, gathering and evaluating __________, reaching a conclusion, and documenting rationale.

alternatives; information

Professional skepticism combines __________, objectivity, and due care, which are central to the AICPA Code of Professional Conduct.

independent thought

A violation of the rules occurs when a CPA allows others acting on their behalf to engage in behavior that would constitute a __________ for the CPA.

violation

The threats to independence include self-review threat, advocacy threat, and __________.

familiarity threat

The AICPA uses a risk-based approach for analyzing threats which involves identifying and __________ threats to independence.

evaluating

Safeguards against threats to independence include professional resources, policies, and the __________ to emphasize compliance with ethical conduct.

tone at the top

Materiality issues arise when certain nonattest services are evaluated based on a materiality criterion, posing challenges regarding __________ and the SEC regulations.

independence

The SEC states that auditor independence must be maintained in __________ and __________, focusing on specific financial interests and business relationships.

fact; appearance

Subordination of judgment is prohibited when a CPA knowingly misrepresents facts or engages in behaviors that could impair __________ and __________.

integrity; objectivity

The conceptual framework identifies threats to integrity and objectivity such as adverse interest, __________, and undue influence threats.

self-interest threat

Professional judgment in accounting is influenced by ethical values, personal traits, and __________ which contribute to ethical sensitivity.

behaviors

CPAs must disclose the nature of any ethical conflict to clients and obtain __________ to proceed with professional services.

consent

In situations where a partner leaves the firm and joins a client, independence may be impaired unless their due amounts are not __________ to the firm.

material

Commissions and referral fees from audit clients are generally __________ by AICPA rules and must be disclosed when recommending services.

prohibited

Acts discreditable include discrimination, failing to file taxes, and __________ on internal exams for continuing education requirements.

cheating

The general standard of independence requires auditors to maintain __________ and __________ during the audit process to avoid conflicts of interest.

objective judgment; impartiality

The PCAOB outlines specific laws such as Rule 3521, which governs __________ and mirrors AICPA standards.

contingent fees