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Audit Chapter 3
Professional Ethics
13
Accounting
Graduate
02/18/2012

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Term
Audit Committee
Definition
BoD committee that oversees the independent and internal auditors. must be independent directors
Term
Close relative
Definition
parent, sibling, nondepedent child
Term
Covered Member
Definition
(a)individual on attest engagement team (b)person in a position influence the attest engagement (c)partner/manager who provides non attest services to client (d)parter in the main attest office (e)
Term
Direct financial interest
Definition
personal investment under direct control of investor.
Term
Immediate family member
Definition
spouse, spousal equiv, dependent
Term
Independence
Definition
2 components: of mind and of appearance
Term
Idependence of mind
Definition
state of mind that permits performance of attest service without any conflict. Can exercise objectivity and professional skepticism
Term
Independence of appearance
Definition
Avoidance of circumstances that would cause a reasonable informed 3rd party to conclude that the integrity, objectivity or professional skepticism of auditor is compromised
Term
Indirect Financial Interest
Definition
specific financial decisions are not under direct control of the investor
Term
Interpretations
Definition
Guidelines issued by the AICPA for the scope and application of the Rules of Conduct
Term
Principles
Definition
the AICPA code of Professional Conduct. Provides a framework for the Rules
Term
Rules
Definition
A group of enforceable ethical stds included in the AICPA Code of Professional Conduct
Term
Significant Influence
Definition
ability of an investor to exercise signif influence ober an entity >20% interest
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