Table of Contents

Course Learning Objectives. 5

Course Description: 5

Chapter 1 - Ethics and Professional Conduct for Arizona CPAs - Section 1. 10

Ethics Background. 10

Morals. 10

What is Ethics?. 10

The Relationship of Morals and Ethics. 11

Illustrative Examples of Ethics. 11

Professional Ethics. 12

Legal versus Ethical 13

Why Should We Study Professional Ethics?. 13

Accounting Ethics. 14

Ethical Core Foundations for CPAs. 14

Ethical Reasoning. 15

Case Studies  Threats and Safeguards. 16

Ethical Dilemmas. 18

Introduction - Arizona: 18

Recent Updates to Arizona Revised Statutes and Administrative Code. 19

Provision of Professional Services to Medical Marijuana Dispensaries by Arizona CPAs. 19

Selected Arizona Statutes. 21

Arizona Accountancy Statutes. 21

Article 2: 32-730.  Biennial registration; continuing professional education. 21

32-730.01. Inactive status; exception. 22

32-730.04. Retired status. 23

Article 2: 32-731. Certified public accountant firm registration requirements; performance of attest services and compilation services; definition. 24

Chapter 1 - Section 1 Review Questions. 27

Chapter 1 - Ethics and Professional Conduct for Arizona CPAs - Section 2. 28

Article3:32-741. Revocation or suspension of certificate; disciplinary action; letter of concern. 28

Chapter 1 - Section 2 Review Questions. 31

Chapter 1 - Ethics and Professional Conduct for Arizona CPAs - Section 3. 32

32-741.01. Suspension for nonregistration; expiration of certificate or registration. 32

32-741.02. Suspension for noncompliance with continuing education requirements; expiration of certificate 32

Article 3:32-744. Ownership and custody of working papers and records. 33

32-745. Employment of persons by accountants. 34

32-746. Fraudulent audit practices; classification. 34

Article 3: 32-747. CPA designation; title; use; unlawful use. 34

Article 3:32-749. Confidential nature of information acquired by accountants; privilege; conditions for disclosure; public records; exceptions. 35

Article 3:32-750. Injunction against unlawful act 36

Article 3:32-751. Actions to recover civil penalties. 36

Chapter 1 - Section 3 Review Questions. 37

Chapter 1 - Ethics and Professional Conduct for Arizona CPAs - Section 4. 38

Arizona Administrative Code. 38

R4-1-101. Definitions. 38

R4-1-114. Hearing; Rehearing or Review.. 39

R4-1-115.03. Peer Review Oversight Advisory Committee. 40

R41341. CPA Certificates; Reinstatement 41

R41344. Denial of Certification. 41

R4-1-345. Registration; Fees. 41

R4-1-346. Notice of Change of Address. 42

R4-1-453. Continuing Professional Education. 43

R4-1-454. Peer Review.. 46

R4-1-455. Professional Conduct and Standards. 48

R4-1-455.01. Professional Conduct: Definitions; Interpretations. 49

R4-1-455.02. Professional Conduct: Competence and Technical Standards. 49

R4-1-455.03. Professional Conduct: Specific Responsibilities and Practices. 50

R4-1-455.04. Professional Conduct: Records Disposition. 51

R4-1-456. Reporting Practice Suspensions and Violations. 51

Case Studies. 52

A Little Extra Income  Contingent Fees. 52

Return of client provided records. 52

Chapter 1 - Section 4 Review Questions. 54

Chapter 1 - Ethics and Professional Conduct for Arizona CPAs - Section 5. 55

AICPA Code of Professional Conduct Overview.. 55

About the Code. 55

Preface. 55

Part 1  Members in Public Practice. 56

Rule 1.100 Integrity and Objectivity. 58

Case Study  Married Tax Clients Divorcing. 59

1.130 Preparing and Reporting Information. 60

Case Study  Year End Adjustments and Loan Covenants. 60

1.200 - Independence. 61

Chapter 1 - Section 5 Review Questions. 66

Chapter 1 - Ethics and Professional Conduct for Arizona CPAs - Section 6. 67

Rule 1.300General Standards Rule. 67

Case Study  Audit Engagement with No Prior Experience. 68

1.310 Compliance with Standards Rule. 68

Case Study  Peer Review Discoveries. 68

1.320 Accounting Principles Rule. 69

1.400.001 Acts Discreditable Rule. 69

1.510.001  Contingent Fees Rule. 70

1.520.001Commissions and referral fees Rule. 72

1.600.001 Advertising and other forms of solicitation. 73

1.700.001 Confidential client information rule. 73

1.800.001Form of organization and name rule. 75

Chapter 1 - Section 6 Review Questions. 76

Chapter 1 - Ethics and Professional Conduct for Arizona CPAs - Section 7. 77

Part 2  Members in Business. 77

2.100.001  Integrity and Objectivity Rule. 77

2.130.030 Obligation of a Member to His or Her Employers External Accountant 78

2.170.010  Pressure to Breach the Rules. 78

2.300.001  General standards rule. 79

2.310.001Compliance with standards rule. 79

2.320.001Accounting principles rule. 79

Case Study - The Company with Excess Reserves. 80

2.400.001 Acts Discreditable Rule. 81

2.400.070 Confidential Information from employment or volunteer activities. 81

Part 3  Other Members. 82

3.400.001 - Acts discreditable rule. 82

3.400.070 Confidential Information from employment or volunteer activities. 82

Chapter 1 - Section 7 Review Questions. 84

Review Explanations/Answers to Review Questions. 85

Glossary. 94

Index. 96

Final Examination. 99