Question

1)

A) What is the AICPA and what do they do today

B) How does the AICPA issue auditing standards (what committee and what is issued)?

• Auditing Standards Board of the AICPA (ASB)
• Statement on Auditing Standards (SAS)

C) Who has to follow the AICPA Code of Professional Ethics?

D) Who is ultimately served by the Code of Professional Ethics?

Answer 1

a)The American Institute of CPAs (AICPA) is a non-profit organization of Certified Public Accountants in the United States. It was established in 1887, and its role is to create and grade the Certified Public Accountant (CPA) examinations. Individuals seeking to practice as accountants in the United States must pass the CPA examination.

AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for the profession and U.S. auditing standards for private companies, nonprofit organizations, federal, state and local governments

b)

The Auditing Standards Board exists to improve existing and enable new audit and attestation services. The Auditing Standards Board is made up of 20 members that are nominated by the director of the AICPA Audit and Attest Standards Staff. Each nominee must be approved by the AICPA Board of Directors

the Statements on Auditing Standards are a collection of regulations relating to the practice of auditing. They come in a variety of different categories, beginning with SAS 1 and continuing through SAS 120 and beyond.

c)A code of ethics emphasizes the profession's responsibility to both the public and colleagues. Every CPA in the practice of public accounting has the responsibility to follow the AICPA Code of Professional Conduct and its applicability to audit, tax, and consulting services.

d)Professionals and those working in acknowledged professions exercise specialist knowledge and skill. How the use of this knowledge should be governed when providing a service to the public can be considered a moral issue and is termed professional ethics.It is capable of making judgments, applying their skills, and reaching informed decisions in situations that the general public cannot because they have not attained the necessary knowledge and skills