Table of Contents

 

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

Ethics Background. 10

Morals. 10

What is Ethics?. 10

The Relationship of Morals and Ethics. 11

Illustrative Examples of Ethics. 12

Professional Ethics. 14

Legal versus Ethical 14

Why Should We Study Professional Ethics?. 14

Accounting Ethics. 15

Ethical Core Foundations for CPAs. 16

Chapter 1 - Section 1 Review Question. 18

Chapter 1 - Ethics and Professional Conduct for Utah CPAs - Section 2. 19

Ethical Reasoning. 19

Case Studies – Threats and Safeguards. 20

Ethical Dilemmas. 22

Public Expectations of the CPA’s Responsibility. 22

Enron and Arthur Andersen. 23

Bernard Madoff Investment Securities LLC – Failures in Expressing an Opinion on Financial Statements  24

Phar-Mor. 26

Motivations of Ethical Lapses. 27

Chapter 1 - Section 2 Review Question. 28

Chapter 1 - Ethics and Professional Conduct for Utah CPAs - Section 3. 29

Utah Code, Title 58, Chapter 26a – Certified Public Accountant Licensing Act 29

Selected definitions applicable to course material within 58-26a-102. 29

58-26a-301 – Who requires a license. 30

58-26a-303 – Term of license and registration. 31

58-26a-304 – Continuing Education. 31

58-26a-307     - CPA emeritus status - Renewal of license. 33

58-26a-401 - Grounds for denial of license - Disciplinary proceedings. 33

58-26a-501 - Unlawful conduct. 35

58-26a-502 - Unprofessional conduct. 36

58-26a-601 - Ownership of statements, records, schedules, working papers, and memoranda made by licensee. 38

58-26a-602 - Privity. 38

Utah Administrative Code, R156-26a – Certified Public Accountant Licensing Act Rule. 39

R156-26a-303a – Renewal Requirements – Peer Review.. 39

R156-26a-303b – Renewal and Reinstatement Requirements – CPE.. 42

R156-26a-307 – Reinstatement of licenses. 48

R156-26a-501.  Unprofessional Conduct. 49

Case Studies. 50

A Little Extra Income – Contingent Fees. 50

Smith & Jones CPA - Competence and Name. 50

Peer Review.. 51

Continuing Education. 52

Chapter 1 - Section 3 Review Question. 54

Chapter 1 - Ethics and Professional Conduct for Utah CPAs - Section 4. 55

The Utah Association of Certified Public Accountants Rules on Ethics. 55

The AICPA Code of Professional Conduct 55

About the Code. 55

Preface. 55

Part 1 – Members in Public Practice. 56

Rule 1.100 Integrity and Objectivity. 59

Case Study – Married Tax Clients Divorcing. 60

1.130 Preparing and Reporting Information. 60

Case Study – Year End Adjustments and Loan Covenants. 61

1.200 - Independence. 61

Chapter 1 - Section 4 Review Question. 67

Chapter 1 - Ethics and Professional Conduct for Utah CPAs - Section 5. 68

Rule 1.300—General Standards Rule. 68

Case Study – Audit Engagement with No Prior Experience. 69

1.310 Compliance with Standards Rule. 69

Case Study – Peer Review Discoveries. 69

1.320 Accounting Principles Rule. 70

1.400.001 Acts Discreditable Rule. 70

1.510.001 — Contingent Fees Rule. 71

1.520.001—Commissions and referral fees Rule. 73

1.600.001 —Advertising and other forms of solicitation. 74

1.700.001— Confidential client information rule. 75

1.800.001—Form of organization and name rule. 76

Chapter 1 - Section 5 Review Question. 77

Chapter 1 - Ethics and Professional Conduct for Utah CPAs - Section 6. 78

Part 2 – Members in Business. 78

2.100.001 – Integrity and Objectivity Rule. 81

2.130.030 Obligation of a Member to His or Her Employer’s External Accountant 83

Case Study – Fair Finance. 83

2.300.001 — General standards rule. 84

2.310.001—Compliance with standards rule. 84

2.320.001—Accounting principles rule. 84

Case Study - The Company with Excess Reserves. 85

Case Study - The Company with Undisclosed/Unrecorded Contingencies. 86

2.400.001 Acts Discreditable Rule. 87

2.400.070 Confidential Information from employment or volunteer activities. 87

Part 3 – Other Members. 88

3.400.001 - Acts discreditable rule. 88

3.400.070 Confidential Information from employment or volunteer activities. 88

Chapter 1 - Section 6 Review Question. 90

Answers to Review Questions. 91

Chapter 1 - Section 1 Review Question Feedback. 91

Chapter 1 - Section 2 Review Question Feedback. 92

Chapter 1 - Section 3 Review Question Feedback. 93

Chapter 1 - Section 4 Review Question Feedback. 95

Chapter 1 - Section 5 Review Question Feedback. 98

Chapter 1 - Section 6 Review Question Feedback. 100

Appendix 1 -  CERTIFIED PUBLIC ACCOUNTANT LICENSING ACT.. 101

Appendix 2 -. 117

Glossary. 138

Index. 140

Final Examination. 142

CPASelfstudy.com Course Evaluation. 146