The Aicpa Code Of Professional Conduct Indicates That Threats To Independence Accounting Essay

The Aicpa Code Of Professional Conduct Indicates That Threats To Independence Accounting Essay According to Auditing and Assurance Services (2011), the general purpose of Rule 101, Independence, is that a member in public practice shall be independent in the performance of professional services as required by standards promulgated by bodies designated by Council. Rule 101 relates primarily to audit and attest engagements. Auditing and Assurance Services (2011) states that auditors should preserve independence, the mental attitude and appearance that auditors are not influenced by others in making judgments and decisions, by a) avoiding financial connections that appear that the auditors wealth depends on the outcome of the audit and b) avoiding managerial connections that make it appear that the auditors are involved in management decisions for the audit client (thus auditing their own work). Auditing and Assurance Services (2011) further states that covered members (in a position to influence can attest engagement) are prohibited from having any financial interest in clients that could affect their audit judgment (independence in fact) or would appear to others to have an influence on their judgment (independence in appearance). In addition, immediate family members are under the same restrictions as the auditor. The AICPA Code of Professional Conduct has the following guidelines in regards to covered members: A covered member cannot: Have a direct financial interest in a client Have a material indirect financial interest in a client Be a trustee or administrator of an estate that has a direct or material indirect financial interest in a client. Have a joint investment with a client that is material to the covered member. Have a loan to or from a client, any officer of the client, or any individual owning more than 10 percent of the client (except as specifically described in interpretation 101-5). Participate on an attest engagement if they were formally employed by the client in a position to influence the audit or acted as an officer, director, promoter, underwriter, or trustee of a pension or profit-sharing trust of the client. A covered members immediate family cannot: Have a direct financial interest in a client. Have a material indirect financial interest in a client. A covered members close relatives cannot: Have a key position with a client Have a material financial interest in a client that is known to the covered member. Have a financial interest in a client that allows the relative to have a significant influence in a client. Be in a position to influence the audit. A partner or professional employee cannot: Be associated with a client as a director, officer, employee, promoter, underwriter, voting trustee, or trustee of a pension or profit-sharing trust of the client. The AICPA Professional Ethics Executive Committee (PEEC) has a three step risk-based approach to evaluate whether a practice or relationship poses an unacceptable risk to CPAs independence. The steps are: 1) Identifying and evaluating threats to independence; 2) Determining whether safeguards eliminate or sufficiently mitigate the identified threats; 3) Determining whether independence is impaired. (Auditing Assurance Services (2010)). The AICPA Code of Professional Conduct indicates that threats to independence include: Familiarity threat CPAs having a close or longstanding relationship with a client. Adverse interest threat CPAs acting in opposition to clients Undue influence threat Attempts to coerce or otherwise influence the CPA member Self-review threat CPAs reviewing their own work Financial self-interest threat CPAs having a financial relationship with a client Management participation threat CPAs taking on the role of client management or otherwise performing management functions Advocacy threat CPAs promoting a clients interest or position. According to Auditing and Assurance Services (2011), the general purpose of Rule 102, Integrity and Objectivity, states in the performance of any professional service, a member shall maintain objectivity and integrity, shall be free of conflicts of interest, and shall not knowingly misrepresent facts or subordinate his or her judgment to others. Accounting and Assurance Services (2011) states that Rule 102 applies not only to CPAs in public practice but also to CPAs working in government and industry. The rule requires integrity and objectivity in all types of professional work tax practice and consulting practice as well as audit practice for public accountants and all types of accounting work performed by CPAs employed in corporations, not for profit organizations, governments, and individual practices. The AICPA Code of Professional Conduct indicates that in addition to integrity and objectivity, Rule 102 emphasizes 1) being free from conflicts of interest between CPAs and others; 2) representing facts truthfully in reports and discussions; 3) not letting other people dictate or influence the CPAs judgment and professional decisions. Conflicts of interest cited in Rule 102 refer to the need to avoid having business interests in which the accountants personal financial relationships or the accountants relationships with other clients might tempt the accountant to fail to serve the best interests of a client or the public that uses the results of the engagement. The phases shall not knowingly misrepresent facts (Interpretation 102-1) and shall not subordinate his or her judgment to others (Interpretation 102-4) from the AICPA Code of Professional Conduct emphasizes conditions people ordinarily identify with the concepts of integrity and objectivity. The prohibition of misrepresentations in financial statements (Interpretation 102-1) applies to the management accountants who prepare companies statements. Government and industry CPAs should not subordinate their professional judgment to superiors who try to produce materially misleading financial statements and fool their external auditors per Auditing Assurance Services (2011). In addition, government and industry CPAs must be candid and not knowingly misrepresent facts or fail to disclose material facts when dealing with their employers external au ditor. Government and industry CPAs cannot have conflicts of interest in their jobs and their outside business interests that are not disclosed to their employers and approved. Rule 102 has two other applications according to the AICPA Code of Professional Conduct. One concerns serving a client advocate (Interpretation 102-6), which occurs frequently in taxation and rate regulation practice and in supporting clients positions in FASB and SEC proceedings. Client advocacy in support or advancement of client positions is acceptance only so long as the member acts with integrity, maintains objectivity, and does not subordinate judgment to others. The other application is directed specifically to professors. They are supposed to maintain integrity and objectivity, be free of conflicts of interest, and not knowingly misrepresent facts to students (Interpretation 102-5). What do you see as the significance of this section for accountants? Integrity is one of the essential pillars of the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct. The AICPA Code of Professional Conduct describes the  accounting professions public as consisting of clients, credit grantors, governments, employers, investors, the  business  and financial community, and others who rely on the objectivity and integrity of CPAs to maintain the orderly functioning of commerce. A distinguishing mark of the accounting profession is acceptance of its responsibility to honor the public trust. Lenders, investors, government agencies, and other members of the business community rely on the integrity of certified public accountants to help preserve the proper functioning of commercial activities. (Integrity: Still a Hallmark of the Public Accounting Profession? (n.d.)) Active and aspiring public accountants ought to embrace the obligation to act in a way that warrants the faith that the entire public reposes in the work they do or will do. Accountants must remain free from conflicts of interest and other questionable business relationships when conducting accounting services. Failure to remain objective and independent may hamper an accountants ability to provide an honest opinion about a companys financial information. There is a clear directive in the principle: Service and the public trust should not be subordinated to personal gain and advantage. (On Integrity, (n.d.)) Integrity and ethics in the accounting industry came to the forefront during the accounting scandals of 2001. Several major publicly held companies, such as Enron, committed serious accounting fraud that misled employees and the general public about each companys financial health. Upon investigating, government regulators found inappropriate relationships between auditors and their clients. Auditors gave management advice on accounting procedures and conducted external audits, resulting in a lack of independence. Accountants from these firms also engaged in unethical behavior by manipulating accounting information. (Integrity Ethics in the Accounting Industry (n.d.)) Per the AICPA: Failure to follow rules of conduct can result in expulsion from the AICPA. This by itself does not prevent a CPA from practicing public accounting, but it certainly is a weighty social sanction. All expulsions from the AICPA for a violation of the rules are published in the CPA Newsletter, a publication that is sent out to all AICPA members, and in The Wall Street Journal. Where do you see situations in an accounting practice that would make the contents of this section particularly relevant? Offer examples of such situations. Independence: Applying the independence rules for an audit: The people who are prohibited from having financial and managerial relationships with the client are the audit engagement team, the people in the chain of command, the covered persons in the public accounting firm, close family members, and immediate family members. (Auditing Assurance Services (n.d.)). Integrity and Objectivity: Assume that an auditor believes that accounts receivable may not be collectible but accepts managements opinion without an independent evaluation of collectability. The auditor has subordinated his or her judgment and thereby lacks objectivity. Now assume that a CPA is preparing the tax return for a client, and as a client advocate, encourages the client to take a deduction on the returns that the CPA believes is valid, but for which there is some but not complete support. This is not a violation of either objectivity or integrity, because it is acceptable for the CPA to be a client advocate in tax and management services. If the CPA encourages the client to take a deduction for which there is no support but has little chance of discovery by the IRS, a violation has occurred. That is a misrepresentation of the facts; therefore, the integrity of the CPA has been impaired. In regards to freedom from conflicts of interest, it means the absence of relationships that might interfere with objectivity and integrity (AICPA Code of Professional Conduct). For example, it would be inappropriate for an auditor who is also an attorney to represent a client in legal matters. The attorney is an advocate for the client, whereas the auditor must be impartial. Apparent conflicts of interest may not be a violation of the rules of conduct if the information is disclosed to the members client or employer (AICPA Code of Professional Conduct). For example, if a partner of a CPA firm recommends that a client have the security of its Internet website evaluated by a technology consulting firm that is owned by the partners spouse, a conflict of interest may appear to exist. No violation of Rule 102 occurs if the partner informs the clients management of the relationship and management proceeded with the evaluation of that knowledge (AICPA Code of Professional Conduct). Examples of conflict of interest per Auditing Assurance Services (n.d.): CPA is engaged to perform litigation support services for a plaintiff in a lawsuit filed against a client CPA is in a personal financial planning engagement, recommends client investment in business in which the CPA has a financial interest. CPA provides tax services for several members of a family who have opposing interests. CPA performs management consulting for a client and has a financial or managerial interest in a major competitor. CPA serves on a city board of tax appeals, which hears matters involving clients. CPA refers a tax client to an insurance broker, who refers clients to the CPA under an exclusive agreement. CPA charges a contingent fee to a client for expert witness litigation support services when the fee can be affected by the opinion the CPA expresses. Offer a list of five sources that you intend to consult in researching your choice. You may include resources on the AICPA website besides the section of the code you have chosen, but only list the AICPA website as one of your five sources. I plan on searching the numerous articles located on the following websites: AICPA.com CPAJournal.com NYSSCPA.org AccountingWeb.com WSJ.com AccountingToday.com In addition, I will be utilizing the NEC library online and also my textbooks from my prior NEC courses. The Auditing Assurance textbook used as a reference in this paper is from the NEC auditing course.

Compare/Contrast Online Shopping vs Traditional Shopping Essay

Online shopping has grown to new heights over the last decade and shows no signs of slowing down. The internet has brought practically every store in the world to the finger tips of anyone with internet access. Shopping online gives the user the opportunity to search for the product they want through endless avenues. Online shopping has grown so large that many companies are not investing in buildings and mall space, rather in online websites and web advertising. Through this paper I will discuss the reasons why shopping online is a better alternative to traditional shopping. The first benefit of online shopping is the convenience. While others are out fighting traffic and waiting in lines, online shoppers are home relaxing. Online shoppers can go from store to store with a flick of a mouse, while traditional shoppers have to walk, drive or can’t get to the stores they want. Online shoppers also benefit when it comes to comparison shopping. Traditional shoppers have to put a lot of work into comparison shopping. They have to drive from place to place find items and price and go onto the next place. This can be exhausting and stressful. The online shopper can do this from his or her couch. Online shoppers can search the planet for the product they are looking for, while traditional shoppers are limited to a small area. Saving money is always a concern when shopping. Many people argue that shipping is the downfall of online shopping. The truth is that if you take all things into consideration shipping charges are minor. Often time the money you spend on gas, food, and time far outweighs the cost of shipping. Online shopping or traditional shopping, everyone has a preference. If you enjoy being out in the crowds, waiting in lines, and getting stressed out then traditional shopping is for you. For me, I’ll take a hot cup of coffee and an easy chair. I believe that there really is no comparison. In theory a person would never have to leave their home. All in all the benefits far outweigh the negatives when it comes to online vs. traditional shoppers. The convenience, the ability to compare products, and the ability to save money all lead to the conclusion that online shopping is the way to go these days.

William Shakespeare s King Henry Iv - 856 Words

Since the start of civilization, leaders have pondered over the qualities that makeup an honorable and legitimate ruler. In William Shakespeare’s play King Henry IV Part One the audience must decide what makes an honorable leader. Throughout the play the main characters, King Henry, Prince Harry, Hotspur, and even Falstaff, help the audience realize what makes up an honorable leader for others to follow. The first character that William Shakespeare wants the audience to look at is King Henry. Henry represents the truth and goodness of the kingdom that he commands. There is some speculation as to how he became King, and rather or not he is the true King of the country. King Henry can be compared to United States President’s Andrew Jackson or Abraham Lincoln. King Henry holds the country together despite parts of his country forming a rebellion against him. Henry is showing the importance of a strong and powerful ruler, just like Andrew Jackson the nullification crisis of 1836, or Abraham Lincoln and the American Civil War. Andrew Jackson told his Vice President John C. Calhoun, â€Å"That the Union must be preserved.† Meaning that the country is more important than the individual state or person. Abraham Lincoln helped lead America through one of the most difficult periods of American history. All three of these leaders show a strong mind and a focus on preserving a unified country no matter the stakes. The next character that Shakespeare introduces to the audience is PrinceShow MoreRelatedThe Conflicting Nature Of Power In Shakespeares King Henry Iv Part 11517 Words   |  7 Pagespivotal characters in William Shakespeare s King Henry IV Part 1 successfully portray the conflicting nature of power throughout the play and ultimately comment on how aspects of politics are subject to the opinions of spectators. Politics is defined as the process of making decisions applying to all members of each group, involving a variety of groups resulting in the nature of politics changing depending on the participants. The conflict between Prince Hal and King Henry the IV highlight the powerlessnessRead MoreWilliam Shakespeare s Influence On The Course Of World History1440 Words   |  6 PagesWaldo Emerson, a famous essayist inspired by Shakespeare’s works. William Shakespeare was a renowned author, poet, actor, and playwright. He has contributed to many components of life today such as; founding modern English language, contributing to literature, contributing to modern theater, and contributing many of his works to modern English. William Shakespeare has greatly impacted the course of world history. 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Predestination is the belief that God determines before birth which Christians will gain salvation/heaven or go to hell. Some of Calvin s strict moral codes that influence us today were: only simple plan clothes were permitted; fashionable styles, jewelry and make-up could not be worn, men/women had to cut their hair; avoid fancy styles, sex outside of marriage is strictly forbidden (those

The Impact of Media Violence Essays - 1146 Words

Media Violence and its negative impact has been discussed and debated for many years As children grow into teens they encounter as vast amount of violence in the media, negatively impacting today’s youth. Teenagers who are exposed to media violence will fail to develop effective socialization strategies and resort more readily to violence, which makes society a more dangerous place. Through social contact, individuals learn to think and act in certain ways, this type of learning is called socialization. One of the most influential agents of socialization is mass media. Children spend an average of four hours in front of a television each day, and with each passing hour, they witness between twenty and twenty-five aggressive acts†¦show more content†¦They cause disruptions in neighborhoods and put the lives of their neighbors in danger by getting involved with a life of crime. Everything these individuals learned was by observing it on the television, this is known as the imitation effect (Phillips). What they observed was violence, so they learned to be violent. The way people behave and problem solve is also impacted from exposure to violence in the media. Jeffery Johnson, of Columbia University, conducted an experiment in which he observed over seventy families within seventeen years, focusing on their viewing habits and various behavioral tendencies, finding that the amount of televisions watched during childhood increased the likelihood of behaving aggressively (Phillips). This experiment is one of many showing that media violence directly impacts behaviour, and has people resorting more readily to violence. Not only does violence in the media have an impact on the way people behave socially, but according to a study done by Dimitri Christakis of the University of Washington, children who watched double the average television viewing hours were twenty-five percent likely to be diagnosed with attention deficit hyperactivity disorder. (Phillips) People diagnosed with ADHD have difficulty focusing, are overactive, and often cannot control their behaviour, disrupting the way people do things (ADD / ADHD in Children). Being in a classroom or on the job with someone who has ADHD will not only affectShow MoreRelatedNegative Impact of Media Violence on Children1704 Words   |  7 PagesViolence in entertainment is as old as civilization itself. In the earlier centuries Romans would delight themselves by cheering on gladiators fought themselves to death. Dramatic theater was also full of jealousy, retribution, and violence. 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TodayRead MoreMedia Violence Has A Negative Impact On Children And Adolescents968 Words   |  4 PagesMedia violence has a negative impact on children and adolescents. Younger and younger children our beginning to show increasingly violent behavior. There has been continuing speculation over the main cause of this. Not all media promotes violence, however all shows do involve violence and when children are exposed to it, it can easily lead to aggressive behavior. Children at younger ages often imitate the actions of characters or celebrities they see on television. Basically, before age four, childrenRead MoreThe Portrayal Of Television Violence1040 Words   |  5 PagesProject Outline The Portrayal of Television Violence in the U.S. Programs and Its Impact on Viewers Introduction Over the past one three decades, there have been cases of increased child violence as well as adult conflicts. Many theories have been developed to explain this growing trend in the society. Media violence has been one of the factors considered. There has been continuous research with regards to the relationship that exists between media violence’s and the behavior of the viewers. SomeRead MoreViolence And Sex On Television898 Words   |  4 Pages Violence and Sex on Television: Effects on the Younger Audience In today’s society, the media is used greatly for communication, advertisement, information, and for numerous other reasons. The world has evolved by technological advances as well as by the type of content that is put out on the internet, radio, and especially on television. In particular, violence and sex are two of the most controversial content types that have been recently used loosely in the present as compared to theRead MoreMedia Violence1535 Words   |  7 Pagesat looking at the potentially harmful effects of the consumption of violent media and the impact it has on psychological factors. Two psychological factors that have been researched are empathy and aggression and how violent media influences these two emotions. Theories that have tried explaining the pathway from the viewing of violence in media and the impact on aggression have generally focused on the role of violent media being used by consumers as observational learning and promoting the developmentRe ad MoreSex And Violence In The Media Influence Teen Behavior.1405 Words   |  6 PagesSex and Violence in the Media Influence Teen Behavior In the 21st Century Sex and Violence in the media has had a good and bad impact on our society. It is very common around the world that many kids are exposed to violence or some type of sexual activity rather in household or in the media. The media has become a common reason as to why violence occur. Teenagers in the 21st century are exposed to more sexuality and violence than ever. Being exposed to sex and violence has had a bad impact on teensRead MoreThe Effects Of Media Violence On Children974 Words   |  4 Pageshave more ways to access many kinds of media, like Internet, video game, television and film. It is generally believed that some of the bad information such as violent content in the media can have a negative effect on people, and it can end up causing some social problem. It is clear that children are more likely to be influenced by media violence than other age groups because of their world outlook and personality are not formed. Furthermore is if media violence doe s have some profound influence onRead MoreMedia Violence And Violent Video Games807 Words   |  4 PagesMedia violence has been tremendously growing and attaining the hazardous extents. Two-thirds of TV shows contain some kind of violence. Most self-involving video games contain some violent matter in it. For example, if you manufacture guns, you do not need to give any advertisement, because it is done by the amusement industry. Aggressive behavior, desensitization to violence, hallucinations, and fear of being mishandled were caused by the media violence, was explained in a 2009 Policy StatementRead MoreMedia Violence And Crime Violence1168 Words   |  5 PagesMedia Violence and Crimes There are few debates that have been contentious for so long as the debate of whether violent medias contribute meaningfully to crimes. Because of the majority of shooting events committed by younger shooters, many politicians regard cultural effects as a potential contributing factor, while others dismiss media as a contributing factor. Within the social science community, a similar division exists (Ferguson, 2015). For example, some professional supporting groups, like