The Aicpa Code Of Professional Conduct Essay

1021 Words Jun 4th, 2016 null Page
For public, business, and other practices, the AICPA Code of Professional Conduct has different Rules for those practices. As for public practice, independence is a required rule but not for CPAs in business and other practices. It is important because there are always some circumstances or relationship occurring to threat the Code compliance so that the public interest will be put at risk. For CPA firms, before they sign the engagement letters with clients, they must make sure the independence of the CPAs and the firms will not be impaired. At this point, auditors can use the conceptual framework to evaluate the relationship or circumstance to decide whether provide service or not. For instance, if the Code can directly address the issues, then the requirements are obvious and auditors can just obey the rules. However, if the Code cannot directly address the issue and create one or more threats to compliance with the Code, the auditors would have to consider whether there are any other factors that can help the auditors to reduce the risk to an acceptable level.

To serve the public interest, there are several threats to the auditors’ independence. First one is adverse interest. In this situation, the auditors or accountants’ interests are opposed to the client’s interest, so the auditors may not act with objectivity and threaten the public interest. However, there is another opposing situation that is completely adverse, where the auditors or accountants are in the same…

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