AICPAsCodeofProfessionalConduct.ppt

Rule 301 Confidential Client Information (cont’l) 4) May initiate a complaint or respond to an inquiry made by ethics or trial board of professional bodies, e.g., state Board of Accountancy or state CPA societies. Rule 301 Confidential Client Information (cont’l) Members who become privy of confidential information in ethics reviews, peer reviews, or trial boards of state CPS societies or state Board of Accountancy have the same responsibilities not to disclose that information. Rule 302 Contingent Fees A contingent fee is where receiving a fee and/or the amount of the fee is dependent upon something happening or not happening at some point in the future, e.g., winning a lawsuit. * PCAOB does not allow contingent fees for auditors of publicly traded companies. Under AICPA’s rules, members can accept contingent fees except for some services. Rule 302 Contingent Fees (cont’l) Member would lack independence if a contingent fee is associated with a client for which the member performed: 1) an audit or review of financial statements, 2) a compilation, or 3) an examination of prospective financial statements for a client. Or if prepared an original or amended tax return for a contingent fee Rule 302 Contingent Fees (cont’l) Note that this rule is not accepted by all state Boards of Accountancy, e.g., Mississippi. In Mississippi contingent fees are completely outlawed for all services. Where it is accepted, there must be disclosure of the facts of the circumstances to the client so that they can make their own judgment as to its possible effects. Rule 400 Responsibilities to Colleagues Presently there are no rules regarding responsibilities to colleagues. Rule 501 Acts Discreditable This is a catch-all. Whenever the member does something that is not covered elsewhere, then this one applies. Examples are retention of client’s working papers to enforce payment of fees, nonpayment of income taxes, or filing fraudulent income taxes. Rule 502 Advertising A