Table of Contents

Chapter 1 - Professional Ethics for Nebraska 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 - Professional Ethics for Nebraska 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 - Professional Ethics for Nebraska CPAs - Section 3. 27

RULES OF THE NEBRASKA BOARD OF PUBLIC ACCOUNTANCY, CHAPTER 5 – RULES OF PROFESSIONAL CONDUCT.. 27

001 Declaration of Purpose. 27

002 Independence. 27

Case Study - Independence. 28

003 Integrity and Objectivity. 28

Case Study - Integrity and Objectivity. 28

004 Competence and Technical Standards. 29

Case Study - Competence. 29

005 Responsibility to Clients. 30

Case Study – Contingent Fees. 32

006 Advertising and Solicitation. 32

007 Other Responsibilities and Practices. 33

CHAPTER 11 – PUBLIC ACCOUNTING PARTNERSHIPS AND PROFESSIONAL CORPORATIONS 36

004 Partnerships, Professional Corporations, Limited Liability Companies and other Permissible Forms of Practice; General Requirements; Ownership. 36

CHAPTER 13 – PEER REVIEW... 38

Case Study - Peer Review.. 40

Chapter 1 - Section 3 Review Questions. 41

Chapter 1 - Professional Ethics for Nebraska CPAs - Section 4. 42

The AICPA Code of Professional Conduct 42

About the Code. 42

Preface. 42

Part 1 – Members in Public Practice. 43

Rule 1.100 Integrity and Objectivity. 45

Case Study – Married Tax Clients Divorcing. 46

1.130 Preparing and Reporting Information. 47

1.200 - Independence. 47

Chapter 1 - Section 4 Review Questions. 53

Chapter 1 - Professional Ethics for Nebraska CPAs - Section 5. 54

Rule 1.300—General Standards Rule. 54

Case Study – Audit Engagement with No Prior Experience. 55

1.310 Compliance with Standards Rule. 55

Case Study – Peer Review Discoveries. 55

1.320 Accounting Principles Rule. 56

1.400.001 Acts Discreditable Rule. 56

1.510.001 — Contingent Fees Rule. 57

1.520.001—Commissions and referral fees Rule. 59

1.600.001 —Advertising and other forms of solicitation. 60

1.700.001— Confidential client information rule. 60

1.800.001—Form of organization and name rule. 62

Chapter 1 - Section 5 Review Questions. 63

Chapter 1 - Professional Ethics for Nebraska CPAs - Section 6. 64

Part 2 – Members in Business. 64

2.100.001 – Integrity and Objectivity Rule. 67

2.130.030 Obligation of a Member to His or Her Employer’s External Accountant 68

2.170.010 – Pressure to Breach the Rules. 69

2.300.001 — General standards rule. 70

2.310.001—Compliance with standards rule. 70

2.320.001—Accounting principles rule. 70

Case Study - The Company with Excess Reserves. 71

Case Study - The Company with Undisclosed/Unrecorded Contingencies. 72

2.400.001 Acts Discreditable Rule. 72

2.400.070 Confidential Information from employment or volunteer activities. 73

Part 3 – Other Members. 74

3.400.001 - Acts discreditable rule. 74

3.400.070 Confidential Information from employment or volunteer activities. 74

Chapter 1 - Section 6 Review Questions. 76

Answers to Review Questions. 77

Chapter 1 - Section 1 Review Questions Feedback. 77

Chapter 1 - Section 2 Review Questions Feedback. 78

Chapter 1 - Section 3 Review Questions Feedback. 79

Chapter 1 - Section 4 Review Questions Feedback. 81

Chapter 1 - Section 5 Review Questions Feedback. 84

Chapter 1 - Section 6 Review Questions Feedback. 86

Glossary. 87

Index. 89

Final Examination. 91

CPASelfstudy.com Course Evaluation. 95