Table of Contents

Chapter 1 - Ethics for Idaho 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 1 - Section 1 - Review Questions. 16

Chapter 1 - Ethics for Idaho 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 1 - Section 2 - Review Questions. 26

Chapter 1 - Ethics for Idaho CPAs - Section 3. 27

Idaho Administrative Code, IDAPA 01, Subchapter E—Rules of Professional Conduct 27

Idaho Administrative Code, IDAPA 01, Subchapter F—Continuing Professional Education. 30

Idaho Administrative Code, IDAPA 01, Subchapter G—Firm Registration and Peer Review.. 35

Idaho Administrative Code, IDAPA 01, Subchapter D, Rule 302. 37

Idaho Statutes, Title 54, Chapter 2 – Selected Statutes. 37

Case Studies. 41

Board Complaint 41

Peer Review.. 41

Contingent fees. 42

Firm Name. 42

Return of client provided records. 43

Chapter 1 - Section 3 - Review Questions. 44

Chapter 1 - Ethics for Idaho CPAs - Section 4. 45

The AICPA Code of Professional Conduct 45

About the Code. 45

Preface. 45

Part 1 – Members in Public Practice. 46

Rule 1.100 Integrity and Objectivity. 48

Case Study – Married Tax Clients Divorcing. 49

1.130 Preparing and Reporting Information. 50

Case Study – Year End Adjustments and Loan Covenants. 51

1.200 - Independence. 51

Chapter 1 - Section 4 - Review Questions. 56

Chapter 1 - Ethics for Idaho CPAs - Section 5. 57

Rule 1.300—General Standards Rule. 57

Case Study – Audit Engagement with No Prior Experience. 58

1.310 Compliance with Standards Rule. 58

Case Study – Peer Review Discoveries. 58

1.320 Accounting Principles Rule. 59

1.400.001 Acts Discreditable Rule. 59

1.510.001 — Contingent Fees Rule. 60

1.520.001—Commissions and referral fees Rule. 62

1.600.001 —Advertising and other forms of solicitation. 63

1.700.001— Confidential client information rule. 63

1.800.001—Form of organization and name rule. 65

Chapter 1 - Section 5 - Review Questions. 66

Chapter 1 - Ethics for Idaho CPAs - Section 6. 67

Part 2 – Members in Business. 67

2.100.001 – Integrity and Objectivity Rule. 70

2.130.030 Obligation of a Member to His or Her Employer’s External Accountant 71

Case Study – Fair Finance. 71

2.300.001 — General standards rule. 72

2.310.001—Compliance with standards rule. 73

2.320.001—Accounting principles rule. 73

Case Study - The Company with Excess Reserves. 73

Case Study - The Company with Undisclosed/Unrecorded Contingencies. 74

2.400.001 Acts Discreditable Rule. 75

2.400.070 Confidential Information from employment or volunteer activities. 76

Part 3 – Other Members. 76

3.400.001 - Acts discreditable rule. 76

3.400.070 Confidential Information from employment or volunteer activities. 77

Answers to Review Questions. 78

Chapter 1 - Section 1 - Review Questions Feedback. 78

Chapter 1 - Section 2 - Review Questions Feedback. 79

Chapter 1 - Section 3 - Review Questions Feedback. 80

Chapter 1 - Section 4 - Review Questions Feedback. 82

Chapter 1 - Section 5 - Review Questions Feedback. 85

Glossary. 87

Index. 89

Final Examination. 91

CPASelfstudy.com Course Evaluation. 95