the AICPA’s Code of Professional Conduct

the AICPA’s Code of Professional Conduct

Part 1: for the following 3 questions, list each defined term (as defined in the AICPA’s Code of Professional Conduct) and which word (or phrase) causes that defined term to apply.  Ex: KPMG = Firm.

Question 1: (5pts)

A CPA prepares a tax return for their dependent child, in exchange for $20.

Question 2: (3 pts)

A CPA works for KPMG, .

Question 3: (3 pts) 

A CPA owns 60% of all voting shares of stock in Big Money Corp

Part 2:

Question 4: (4 pts.)

“Should” has an explicit meaning under the AICPA’s Code of Professional Conduct.  When the Code says a Member “Should” do something, what does this mean?  How is this different from “shall”?

Part 3:  Multiple Choice!  Choose the answer that BEST states which Principle (found in the Preamble) the Member must follow.

Question 5.  (2 pts.)

A client and a CPA begin negotiating what services the CPA will perform for the Client.

1. Scope and Nature of Services
2. Objectivity and Independence
3. Due Care
4. Integrity
5. None of the above

Question 6.  (2 pts.)

A CPA treats a cash accounting client as if it were accrual.

1. Scope and Nature of Services
2. Objectivity and Independence
3. Due Care
4. Integrity
5. None of the above

Question 7: (7 pts)

The steps involved when a member first encounters a threat are:

Question 8: (3 pts)

What is the standard used to determine (a) through (g) above that lets a member know whether they have made a proper determination with regards to a threat?

Question 9:  8 pts.

For each of the 4 schools of ethics we discussed, give an example of a rule/principle/etc within the AICPA that clearly embodies the principles of that school.  Explain why if you feel a need to.  (Ex: “Independence and Objectivity is an example of Virtue Ethics,”)

Question 10: (4 pts)

Part 1 of the code applies to what kind of member, and what 3 defined terms will cause part 1 to apply?

Question 11: (2 pts)

Part 3 of the code applies to what kind of member?

Question 12: (2 pts)

When the code does not have an explicit rule for you to follow, what would you employ to guide your actions–what will you still need to conform to, even in the absence of explicit rules?

Question 13.  (6 pts.)

A CPA at your firm was the CFO at a company you are now preparing the books for.  There is a clear conflict of interest with your firm; (2 pts) what SPECIFIC safeguards would you put into place to reduce this threat to an acceptable level?  (2 pts)  Name one principle at risk here, and (2 pts) name a threat to that principle.

Question 14:  (2 pts.)

A client threatens to sue you. Which threat does this most clearly fall under?

A client threatens to sue you.  Which threat does this most clearly fall under?