AICPA ETHICS COMPREHENSIVE QUESTIONS AND
ANSWERS SURE A+
✔✔Acts Discreditable to the Profession - ✔✔-discrimination and harassment
-noncompliance with government regulations
-improper preparation of financial statements
-removing client files
-failure to timely filing of tax returns
-indemnification or limitation of liability
-disclosure of employer's confidential information (including volunteer positions)
Records Request by Client
-member must always return to the client documents the client provided him or her to
perform the service (only have to return to client's representative, ex. general partner
and not to all limited partners)
-may withhold certain work product that is incomplete or for which the client has not yet
paid
✔✔Transfer of Files and Return of Client Records in Sale, Transfer, Discontinuance, or
Acquisition of a Practice - ✔✔If the member sells or transfers a practice to another party
and will no longer retain any ownership in the practice, the member should do the
following:
-request in writing the client's consent to transfer records to the successor firm or owner
-if the client does not reply within 90 days, the member may presume consent is given
If the member is discontinuing the practice, but does not sell or transfer the practice, he
or she should do the following:
-notify each current client
-return the client's records to client as specified in the "Records Request" interpretation
unless the member had a different arrangement with the client
, If a member is buying (not selling) all or part of another member's practice, the member
should determine that:
-the seller has notified the firm's clients that are being acquired of the sale,
-those clients have consented to the continuation of professional services by the
member acquiring the practice (or 90 days has lapsed since client was notified), and
-those clients have not objected to the retention of any client files or records the
member obtained as part of the purchase
✔✔Rules for CPAs in Public Practice - ✔✔Outsourcing
-you are required to take certain actions when you outsource the performance of your
services to "third-party providers"
-inform the client that you may be using a service provider
-must oversee service provider and make sure all applicable professional standards are
met
-enter agreement with contractor for client confidentiality
Advertising & Solicitations
-may not advertise their services in a manner that is false, misleading, or deceptive
-solicitation by the use of coercion, over-reaching, or harassing conduct is prohibited
Form of Organization & Firm Name
-firm name cannot be misleading
-names of past owners may be included in the firm name, even when merger
-may designate firm as a member of the AICPA only if all CPA owners are members of
the institute
If a member controls the business, then everyone in the business is subject to the
AICPA code. If the member does not control the business, then only the individual must
comply with the AICPA code.
✔✔ Ethical Decision Making Model - ✔✔helps you actively work through gray area and
choose the best possible solution to an ethical dilema
Step 1: Recognize the ethical issue
Step 2: Gather the critical facts
Step 3: Identify the stakeholders
Step 4: Consider your alternatives
Step 5: Consider the effect on stakeholders
Step 6: Consider your comfort level
Step 7: Consider rules, regulations and laws
Step 8: Make a decision
Step 9: Document your efforts
Step 10: Evaluate the outcome
✔✔Step 1 - ✔✔Recognize the ethical issue
ANSWERS SURE A+
✔✔Acts Discreditable to the Profession - ✔✔-discrimination and harassment
-noncompliance with government regulations
-improper preparation of financial statements
-removing client files
-failure to timely filing of tax returns
-indemnification or limitation of liability
-disclosure of employer's confidential information (including volunteer positions)
Records Request by Client
-member must always return to the client documents the client provided him or her to
perform the service (only have to return to client's representative, ex. general partner
and not to all limited partners)
-may withhold certain work product that is incomplete or for which the client has not yet
paid
✔✔Transfer of Files and Return of Client Records in Sale, Transfer, Discontinuance, or
Acquisition of a Practice - ✔✔If the member sells or transfers a practice to another party
and will no longer retain any ownership in the practice, the member should do the
following:
-request in writing the client's consent to transfer records to the successor firm or owner
-if the client does not reply within 90 days, the member may presume consent is given
If the member is discontinuing the practice, but does not sell or transfer the practice, he
or she should do the following:
-notify each current client
-return the client's records to client as specified in the "Records Request" interpretation
unless the member had a different arrangement with the client
, If a member is buying (not selling) all or part of another member's practice, the member
should determine that:
-the seller has notified the firm's clients that are being acquired of the sale,
-those clients have consented to the continuation of professional services by the
member acquiring the practice (or 90 days has lapsed since client was notified), and
-those clients have not objected to the retention of any client files or records the
member obtained as part of the purchase
✔✔Rules for CPAs in Public Practice - ✔✔Outsourcing
-you are required to take certain actions when you outsource the performance of your
services to "third-party providers"
-inform the client that you may be using a service provider
-must oversee service provider and make sure all applicable professional standards are
met
-enter agreement with contractor for client confidentiality
Advertising & Solicitations
-may not advertise their services in a manner that is false, misleading, or deceptive
-solicitation by the use of coercion, over-reaching, or harassing conduct is prohibited
Form of Organization & Firm Name
-firm name cannot be misleading
-names of past owners may be included in the firm name, even when merger
-may designate firm as a member of the AICPA only if all CPA owners are members of
the institute
If a member controls the business, then everyone in the business is subject to the
AICPA code. If the member does not control the business, then only the individual must
comply with the AICPA code.
✔✔ Ethical Decision Making Model - ✔✔helps you actively work through gray area and
choose the best possible solution to an ethical dilema
Step 1: Recognize the ethical issue
Step 2: Gather the critical facts
Step 3: Identify the stakeholders
Step 4: Consider your alternatives
Step 5: Consider the effect on stakeholders
Step 6: Consider your comfort level
Step 7: Consider rules, regulations and laws
Step 8: Make a decision
Step 9: Document your efforts
Step 10: Evaluate the outcome
✔✔Step 1 - ✔✔Recognize the ethical issue
