Rule 301 of the American Institute of Certified Public Accountants’ professional standards states that a member CPA “shall not disclose any confidential client information without the specific consent of the client.” Auditing documentation should not be made available to outside parties without the authorizing of the client. Although the protection of a client’s information is an important principle of being professional, the member need to release the information under certain circumstance. Here
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being the government, clients and third parties. In today’s capitalist society, the accounting profession is deemed to be a common and important feature. Discussing the responsibilities accountants have to the three parties identified above would, therefore, certainly be a prudent and logical move. Responsibility to Clients To begin with, accountants have a responsibility to keep client information confidential. If an accountant discloses confidential client information to a third party, such
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partner is part of an audit engagement, they can not own stock for the company in which they are responsible for reporting the audit for, even if the client is out of another office. The audit report must be from an individual that is independent of the company. As for the professional staff members, they too can not own stock with any of the clients they conduct audits with, if they have been assigned to engagement or if they become partner of the office. The stock they own can only be for companies
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accounting principles. c. (3) Qualified opinion. 3-26 a. The financial statements mentioned as “correctly stated” imply absolute accuracy but the other report states that no material misstatements exist. b. The reference to GAAP specifies the rules that were followed for transactions but “true economic conditions” does not identify specific procedures that are applied. c. The “opinion” paragraph it not intended for certification/guarantee of the accuracy of the statements but it is intended
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member of the AICPA. Bradley is a CPCU (Chartered Property Casualty Underwriter). The corporation performs auditing and tax services under Gilbert’s direction and insurance services under Bradley’s supervision. One of the corporation’s first audit clients was Grandtime Company. Grandtime had total assets of $600,000 and total liabilities of $270,000. In the course of his examination, Gilbert found that Grandtime’s building with a carrying value of $240,000 was pledged as collateral for a 10-year term
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Auditing and Assurance Services, 15e (Arens) Chapter 4 Professional Ethics Learning Objective 4-1 1) Ethics are: A) needed in the professions, but is not needed for society in general. B) a set of moral principles or values. C) not formed by life experiences. D) always incorporated in laws. Answer: B Terms: Ethical Principles Diff: Easy Objective: LO 4-1 AACSB: Ethical understanding and reasoning abilities 2) ________ means that a person acts according to conscience, regardless
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Smackey Dog Food Inc. has hired my firm and me, Keller CPAs, to complete an audit of their company and its financial statements. To continue being the successful company that they are, Sarah, Kim, and Jillian need to get better control of the company in its aspects of general business including inventory control and accounting. From the looks of things now, they are failing and headed in a downward spiral if they way things are happening continue. One of our jobs as an auditing company is to locate
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Responsibility to Clients and the Profession Abstract The professional responsibilities of a Certified Public Accountant (CPA) to their clients were investigated. The responsibilities were determined by the American Institute of Certified Public Accountants Code of Professional Conduct. Specifically, Rule 102 regarding integrity and objectivity was used to determine what constituted as integrity and objectivity in the practice of a CPA acting as the moral conscience of their client. Rule 301 was used
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is not an audit client. No c. Implementing a financial information system designed by management for a private company. No d. Recommending a tax shelter to a client that is publicly held. The services were pre-approved by the audit committee. No e. Providing internal audit services to a public company client with the pre-approval of the audit committee. Yes f. Providing bookkeeping services to an audit client that is a private company. No 4-21 a. Rule 101 - Independence
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Memo RE: When Is Resignation Not Enough – An Ethical Dilemma FACTS: In 1989, Page Nolan left Smith, Jones, & Brown CPA firm to work as a controller for Anonymous Company. The main focus of her job was to keep the books for the many business units and see that income and expenses were assigned properly, while all government requirements were met. Nolan soon realized that the company was incorrectly booking consulting fees. The consulting expenses were correctly stated, to bring the profit
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