MIPPs introduction and conceptual framework Flashcards Preview

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Flashcards in MIPPs introduction and conceptual framework Deck (4)
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1
Q

MIPPS

A

members in public practice

2
Q

conceptual framework-3 steps

need to apply this framework if a problem arises and there isn’t a rule to solve it

A

identify threats to compliance

evaluate the significance of those threats (see if they can be reduced to an acceptable level)

identify and apply safeguards

3
Q

seven types of threats to objectivity and integrity

A

adverse interest threats-you and client have different interests and opinions. litigation etc

advocacy threats- advocating for your client. its a problem if its a attest client (supposed to be the watchdog). can be advocate if its and advisory client.

familiarity threats-spouse or relative, friend work for client

management participation-a problem when attest client- member takes on role of management

self interest threats-member has financial interest in client that may be affected by the outcome of a professional services engagement. or reliance of excessive revenue from a single client

self review threat- rely on work of member of own firm its hard to be objective. or auditing own work

undue influence threats- client threatens to fire firm or threaten future business. major shareholder threatens

are the threats that these pose to my objectivity and integrity so great that I cant ratchet down to an acceptable level?

4
Q

three categories of safeguards

A
  1. created by the profession, legislation, or regulation.
    education and training requirement, including cpe
    professional standards and the threat of discipline
    external reviews firm quality control system
    legislation establishing prohibitions and requirements
    for a firm and its professionals.
    competancy and experience requirements for license
    professional resources such as hotlines etc

2.Implemented by the client
(big picture, is this a good client?)
clientele with suitable skills
tone at the top
procedures in place to promote compliance and fin reporting
procedures in place for ethical issues
governance structure such as audit committee
policies in place that bar the entity from hiring a firm to provide services that do not serve public interest or impair independence

  1. implemented by your own accounting firm
    firm leadership stresses rule compliance and acting in public interest
    policies and procedures made to implement quality control
    someone from senior management to oversee quality control
    disciplinary mechanism
    rotation of senior personell
    procedures that prevent management from being compensated based on services they sell