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18 Cards in this Set
- Front
- Back
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code of professional conduct
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cpa is strictly liable in performance of services
-reinforcement by peers -public opinion -disciplinary proceeds-revoke license, admonishment, suspension up to 2 yrs, expulsion from aicpa |
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automatic expulsion by AICPA
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-cpa certificate is revoked by state board of accountancy
-convicted of felony -files or helps fraudulent tax return -intentionally fails to file tax return |
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SCIENTER
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FRAUD
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GROSS NEGLIGENCE
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a reckless regard for the truth
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CONSTRUCTIVE FRAUD
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1) misrepresentation of a material fact
2) reckless regard for the truth 3) reasonable reliance by the injured party 4) actual damages |
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COMMON LAW FRAUD
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1) misrepresentation of material fact
2) scienter -showing intent to mislead or reckless regard for the truth 3) reasonable reliance 4) actual damages |
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-CONTRIBUTORY NEGLIGENCE OF CLIENT
-LACK OF PRIVITY |
accountants defenses in cases of fraud
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ULTRAMARES RULE
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accountant is held liable only to parties whose primary benefit the financial statements are intended
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due professional care
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-critical review of judgment used at every level
-skill and care of prudent cpa -prep of workpapers -without negligence/ due diligence |
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CPA'S BEST DEFENSE
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-exercised due care
-audit was done in accordance with GAAS |
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CPA'S BEST DEFENSE FOR COMMON LAW FRAUD
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false statements are immaterial
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10 Generally Accepted Auditing Stds GAAS
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-measures the quality of the auditor's performance
-TIPPIECANOE |
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TIPPICANOE - General Stds TIP
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-Training & Proficiency
-Independence -Professional Care - due prof care |
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TIPPICANOE - Fieldwork Stds PIC
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-Planning and Supervision
-Internal controls - can you rely? -Competent evidential matter - substantive testing -Corroborative appropriate evidence |
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TIPPICANOE - Reporting Stds ANOE
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-Accounting Principles in conformity with GAAP
-No new acctg principles -Consistency -Omitted Informative Disclosures - None -Expression of Opinion |
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independence
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to act with integrity & objectivitiy
-for attestation engagements -not for compilations, consultations & taxes |
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not independent if
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-any direct financial interest in client
(10% or more of client owned entity) -any material indirect financial interest -more than 1 yr of audit fees outstanding - |
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what would impair independence?
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-prior year past due fees are unpaid for audit
-auditor becomes the agent of a client to transfer stock (agent = management) -client hasn't paid audit fees more than 1yr from date of report -leasing property to the client = indirect financial interest = independence impaired *auditor owning a checking acct from from bank that she audits = does not impair independence |
