Table of Contents

Chapter 1 - Professional Ethics for New Hampshire CPAs - Section 1. 9

Ethics Background. 9

Morals. 9

What is Ethics?. 9

The Relationship of Morals and Ethics. 10

Illustrative Examples of Ethics. 11

Professional Ethics. 13

Legal versus Ethical 13

Why Should We Study Professional Ethics?. 13

Accounting Ethics. 14

Ethical Core Foundations for CPAs. 14

Chapter - Section 1 Review Question. 16

Chapter 1 - Professional Ethics for New Hampshire CPAs - Section 2. 17

Ethical Reasoning. 17

Case Studies – Threats and Safeguards. 18

Ethical Dilemmas. 20

Public Expectations of the CPA’s Responsibility. 20

Enron and Arthur Andersen. 21

Bernard Madoff Investment Securities LLC – Failures in Expressing an Opinion on Financial Statements 22

Phar-Mor. 24

Motivations of Ethical Lapses. 25

Chapter - Section 2 Review Question. 26

Chapter 1 - Professional Ethics for New Hampshire CPAs - Section 3. 27

New Hampshire Board of Accountancy Rules, Chapter Ac 500 - ETHICS. 27

PART Ac 501 APPLICABILITY.. 27

PART Ac 502 INDEPENDENCE.. 27

Case Study - Independence. 28

PART Ac 503 INDEPENDENCE, INTEGRITY AND OBJECTIVITY.. 28

Case Study - Integrity and Objectivity. 29

PART Ac 504 GENERAL STANDARDS OF ACCOUNTING PRINCIPLES. 29

Case Study - Competence. 30

PART Ac 505 CONFIDENTIAL CLIENT INFORMATION.. 30

PART Ac 506 CONTINGENT FEES. 32

Case Study – Contingent Fees. 32

PART Ac 507 ACTS DISCREDITABLE.. 33

PART Ac 405 PEER REVIEW... 34

Case Study - Peer Review.. 36

PART Ac 404 ONGOING REQUIREMENTS. 36

Case Study - Return of client provided records. 37

Chapter - Section 3 Review Question. 39

Chapter 1 - Professional Ethics for New Hampshire CPAs - Section 4. 40

The AICPA Code of Professional Conduct 40

About the Code. 40

Preface. 40

Part 1 – Members in Public Practice. 41

Rule 1.100 Integrity and Objectivity. 43

Case Study – Married Tax Clients Divorcing. 44

1.130 Preparing and Reporting Information. 45

1.200 - Independence. 45

Chapter - Section 4 Review Question. 51

Chapter 1 - Professional Ethics for New Hampshire CPAs - Section 5. 52

Rule 1.300—General Standards Rule. 52

Case Study – Audit Engagement with No Prior Experience. 53

1.310 Compliance with Standards Rule. 53

Case Study – Peer Review Discoveries. 53

1.320 Accounting Principles Rule. 54

1.400.001 Acts Discreditable Rule. 54

1.510.001 — Contingent Fees Rule. 55

1.520.001—Commissions and referral fees Rule. 57

1.600.001 —Advertising and other forms of solicitation. 58

1.700.001— Confidential client information rule. 58

1.800.001—Form of organization and name rule. 60

Chapter - Section 5 Review Question. 61

Chapter 1 - Professional Ethics for New Hampshire CPAs - Section 6. 62

Part 2 – Members in Business. 62

2.100.001 – Integrity and Objectivity Rule. 65

2.130.030 Obligation of a Member to His or Her Employer’s External Accountant 66

2.170.010 – Pressure to Breach the Rules. 66

Case Study – Fair Finance. 67

2.300.001 — General standards rule. 68

2.310.001—Compliance with standards rule. 68

2.320.001—Accounting principles rule. 68

Case Study - The Company with Excess Reserves. 69

Case Study - The Company with Undisclosed/Unrecorded Contingencies. 70

2.400.001 Acts Discreditable Rule. 70

2.400.070 Confidential Information from employment or volunteer activities. 71

Part 3 – Other Members. 72

3.400.001 - Acts discreditable rule. 72

3.400.070 Confidential Information from employment or volunteer activities. 72

Answers to Review Questions. 74

Chapter - Section 1 Review Question Feedback. 74

Chapter - Section 2 Review Question Feedback. 75

Chapter - Section 3 Review Question Feedback. 76

Chapter - Section 4 Review Question Feedback. 78

Chapter - Section 5 Review Question Feedback. 81

Glossary. 83

Index. 85

Final Examination. 87

CPASelfstudy.com Course Evaluation. 91