Chapter 4 Professional Ehics

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Chapter 4 Professional Ethics  Review Questions The six core ethical values described by the Josephson Institute are: 1. Trustworthiness 2. Respect 3. Responsibility 4. Fairness 5. Caring 6. Citizenship 4-1 There are many other potential sources of ethical values, including laws and regulations, church doctrines, codes of professional ethics, and individual organizations’ codes of conduct. 4-2 An ethical dilemma is a situation that a person faces in which a decision must be made about the appropriate behavior. There are many possible ethical dilemmas that one can face, such as finding a wallet containing money, or dealing with a supervisor who asks you to work hours without recording them. An ethical dilemma can be resolved…show more content…
In addition, an accountant is not independent of an audit client if an audit partner received compensation based on selling engagements to that client for services other than audit, review and attest services. Companies are required to disclose in their proxy statement or annual filings with the SEC the total amount of audit and nonaudit fees paid to the audit firm for the two most recent years. Four categories of fees are to be reported: (1) audit fees; (2) audit-related fees; (3) tax fees; and (4) all other fees. Companies are also required to provide further breakdown of the “other fees” category, and provide qualitative information on the nature of the services provided. 4-8 The rules concerning stock ownership by partners and professional staff: A partner in the office of the partner responsible for an audit engagement cannot own stock in that audit client. A partner can own stock in an audit client, as long as (1) he or she cannot influence the audit engagement and (2) he or she is not in the same office as the partner responsible for the audit engagement. A professional staff member cannot own stock in an audit client if he or she is assigned to the engagement or if he or she becomes a partner in the office of the partner responsible for the audit engagement. A professional staff member can own stock in a firm’s audit client as long as he or she does

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