The provision of services by a firm or network firm to an audit client that involve the designand implementation of financial information technology systems that are used to generateinformation forming part of a clients financial statements may most likely createa. Examples of such services include the following, except a. Examples of circumstances that may create familiarity threat least likely include a. Family and personal relationships between a member of the assurance team and a director, an officer or certain employees, depending on their role, of the assurance client, least likely create a. A firm of professional accountants in public practice. Implementing policies and procedures to prohibit the individual providing such servicesfrom making any managerial decisions on behalf of the audit client. The safeguards necessary to reduce the threat, created by providing accounting and bookkeeping services to an audit client that is not a listed entity, to an acceptable level might include the following, except a.
Doubt may be resolved in favor of the client or the employer if there is reasonable supportfor the position. A professional accountant in public practice in the Philippines, where advertising is prohibited, may advertise in a newspaper or magazine published in a country where advertising is permitted. These standards will address how the company conducts business on an everyday basis, these standards need to be followed on an everyday basis, and otherwise they are worthless. An inadvertent violation of the rules on family and personal relationships would not impair theindependence of a firm or a member of the assurance team when: a. Code of Ethics One word: Enron.
Immediately inform the revenue authorities. Dispose of the direct financial interest prior to the individual becoming a member of the assurance team. Part B applies only to those professional accountants in public practice. An entity that has direct or indirect control over the client provided the client is material to such entity. Occurs when a firm or a member of the assurance team could benefit from a financial interest in, or other self-interest conflict with, an assurance client.
The close family member disposing of all or a sufficient portion of the financial interest at the earliest practical date. It is clearly desirable that the public should be aware of the range of services availablefrom a professional accountant. This allows those professionals who act with conscience to practice in the knowledge that they will not be undermined commercially by those who have less ethical qualms. Advertising, as defined in the Code of Ethics, means a. These following services are considered to be a normal part of the audit process and do not, under circumstances, threaten independence, except a. A distinct sub-group, whether organized on geographical or practice lines.
A professional accountant writes a letter to another professional accountant seeking employment or professional business. Internal procedures that ensure objective choices in commissioning non-assuranceengagements. Payment and receipt of commissions were not permitted in the Philippines. When faced with significant ethical issues, professional accountants should do the following, except a. Which of the following is least likely considered to create a threat to independence? I only c Yes d Yes No No No Yes 49. A professional accountant in public practice should not concurrently engage in anybusiness, occupation or activity which impairs or might impair integrity, objectivity orindependence, or the good reputation of the profession.
Which of the following threats to independence can be eliminated or reduced to anacceptable level? When the ethical requirements of the country in which services are being performed are stricter than the Code of Ethics of the Philippines, then the ethical requirements in the country where services are being performed should be applied. Your paper should be written in a clear, concise, and organized manner; demonstrate ethical scholarship in accurate representation and attribution of sources; and display accurate spelling, grammar, and punctuation. Close family include the following, except a. The firm, and the network firm, has established policies and procedures that require allprofessionals to report promptly to the firm any breaches resulting from the purchase,inheritance or other acquisition of a financial interest in the assurance client. Advertising and solicitation by individual professional accountants in public practice were not permitted in the Philippines. Advertising and solicitation by individual professional accountants in public practice werenot permitted in the Philippines. A professional accountant in public practice currently holding an audit appointment orcarrying out accounting, taxation, consulting or similar professional services for a client.
Professional accountants employed in the public sector having managerialresponsibilities. An entity under common control, ownership or management with the firm or any entity that a reasonable and informed third party having knowledge of all relevant information would reasonably conclude as being part of the firm nationally or internationally. Examples of such circumstances include: a. The term receiving accountant includes the following, except a. May include such activities as acting as an expert witness, calculating estimated damages or other amounts that might become receivable or payable as the result of litigation or other legal dispute, and assistance with document management and retrieval in relation to a dispute or litigation. These objectives requirefour basic needs to be met including the following, excepta. Examples of circumstances that may create self-interest threat includea.
Confidentiality requires that a professional accountant acquiring information in the courseof performing professional services neither uses nor appear to use that information forpersonal advantage or for the advantage of a third party. The firm, and the network firm, has established policies and procedures that require all professionals to report promptly to the firm any breaches resulting from the purchase, inheritance or other acquisition of a financial interest in the assurance client. Which of the following is incorrect regarding independence? While the lead engagement partner should be rotated after such a pre-defined period, somedegree of flexibility over timing of rotation may be necessary in certain circumstances. However, independence is deemed not to be compromised if these interests are immaterial and the audit client cannot exercise significant influence over the entity. The principle of objectivity imposes the obligation on all professional accountants to befair, intellectually honest and free of conflicts of interest. A direct financial interest or material indirect financial interest in an assurance client. Provision of Legal Services to Audit Clients 99.
Monies may only be drawn from the client account on the instructions of the client. The accountancy profession's public consists of clients, credit grantors, governments, employers, employees, investors, the business and financial community, and others who rely on the objectivity and integrity of professional accountants. If the valuation services involves the valuation of matters material to the financial statementsand the valuation involves a significant degree of subjectivity, the self-review threat created choose the incorrect one a. How did the Code of Ethics define public interest? Fees calculated on a predetermined basis relating to the outcome or result of a transaction or the result of the work preformed. The trust is not able to exercise significant influence over the assurance client.
Professional Competence and due Care c. A professional accountant, particularly one having authority over others, should give due weight for the need for them to develop and hold their own judgment in accounting matters and should deal with difference of opinion in a professional way. The nature of the assurance engagement. Board members and employees are expected to abide by the policies and procedures regarding standards of conduct set forth in the respective documents. A professional accountant has a professional duty or right to disclose confidential informationin each of the following, excepta. Independence is a combination of impartiality, intellectual honesty and a freedom fromconflicts of interest.