Table of Contents

Course Information.. ii

Section I. Current Ethical Issues in the Accounting Profession.. 1

Understanding Ethics. 1

A Definition of Ethics. 1

How do you act when no one is looking?. 1

Ethical Theory. 1

Utilitarianism... 2

Deontology. 2

Ethics of Care. 3

Professional Ethics. 6

The Study of Business Ethics. 6

The Study of Accounting Ethics. 7

Special Topics: Managing Ethics. 10

Analytical Model for Ethical Decisions. 10

Fiduciary Standard of Care. 11

Managing Conflicts of Interest When Providing a Range of Services. 12

Special Topics: Regulatory Ethics. 15

Objectives-Oriented Accounting. 15

AICPA: Recent Ethics Inquiries. 18

AICPA: Recent Ethics Inquiries. 18

Review Questions. 21

Section II. AICPA Code of Professional Conduct 23

Preface: Applicability and Principles of Professional Conduct 23

Applicability. 23

The AICPA Principles. 23

Using the Principles in Practice. 27

Part One of the AICPA Code: Members in Public Practice. 31

Rules Are Not Enough. 31

The Conceptual Framework Approach. 33

Ethical Conflicts. 34

Rules of the Code of Professional Conduct 35

Independence, Integrity, and Objectivity:  The Core Values of the Accounting Profession. 35

1.100 Integrity and Objectivity Rule. 35

1.200 Independence Rule. 39

1.300 General Standards. 55

1.400 Acts Discreditable Rule. 58

1.500 Fees and Other Types of Remuneration. 62

1.600 Advertising and Other Forms of Solicitation Rule. 64

1.700 Confidential Client Information Rule. 65

1.800 Form of Organization and Name Rule. 67

Case Studies. 69

1. Stop Thief! The Case of the Almost Stolen Clients. 69

2. Oops! The Case of the Harmless Mistakes. 70

3. Do You Have What It Takes? The Case of the Inadequate Accountant 72

4. The Last Shot at the Buzzer...Too Late!  The Case of the Losing Lady. 73

5. Give It Back!   The Case of Empty Promises. 75

Review Questions. 77

Section III. Summary of Minnesota Statutes and Board of Accountancy Rules. 79

Terminology. 79

Definitions of Terminology used in the Minnesota Statutes (326A.01) 79

Definitions of Terminology used in the Minnesota Board of Accountancy Rules (1105.0100). 81

Minnesota State Board of Accountancy. 83

The Board. 83

Powers of the Board. 83

Rules Adopted by the Board. 83

Interacting with the Board. 85

Individual Licensing and Renewal 86

Certificate Renewal; Competency Standard. 86

Exemption from Certificate Renewal Requirement. 87

Substantial Equivalency and Practice Privileges. 88

Continuing Professional Education Requirements. 92

Requirements. 92

Continuing Professional Education Programs. 93

Continuing Professional Education Reporting and Records. 95

Exception to Continuing Professional Education Requirement 96

Firms Permits. 97

Permit to Practice as a CPA Firm... 97

Application Requirements for Firm Permit 99

Notifying Board of Changes. 101

Headquarters Location of Client 101

Internet Practice. 102

Peer Review. 102

Terminology. 102

Peer Review as a Condition for Renewal of Permit 103

Peer Review: Applicability. 103

Peer Review Standards. 105

Peer Review: Report to Board. 107

Peer Review Material: Private Data. 108

Code of Professional Conduct 108

Acts Discreditable. 108

Confidential Communications. 113

Working Papers; Clients' Records. 114

Retention and Content of Audit Documentation. 114

Enforcement 116

Grounds for Enforcement Action. 118

Misleading CPA Firm Names. 120

Fictitious Firm Names. 122

Safe Harbor Language. 123

Registered Accounting Practitioner (RAP) 124

Registration Requirements (RAP) 124

Review Questions. 126

Appendix I. AICPA Glossary. 128

Appendix II. Answers and Explanations to Review Questions. 137

Section I.  Current Ethical Issues in the Accounting Profession. 137

Section II.  AICPA Code of Professional Conduct 140

Section III. Minnesota Board of Accountancy. 144

Index. 150

CPE Exam... 153

Endnotes. 162