Question

 

1. Why is so important the ethic for the CPA conduct?

2.  Explain the Code of Professional conduct.

3.  Why is so important the partner rotation?

Answer 1

1.

The work of a CPA includes auditing, accounting and tax services.
Many persons like shareholders, lenders, and investors etc. take decisions on the basis of financial statements.
They trust the work of a CPA and take decisions based on the report of a CPA.
So, it is very important the ethic for the CPA conduct.

2.

The American Institute of Certified Public Accountants (AICPA) provides Code of Professional conduct.
It contains moral & ethical standards for the profession.
All CPAs need to abide these standards.

There are four parts of CPA Code of Professional conduct-
i. Principles
ii. Rules of conduct
iii. Interpretations of the rules of conduct
iv. Ethical rulings

3.

The firms required to rotate its signing audit partners of audit reports. It is aligned with Professional Conduct.

The partner rotation is important because-
1.It improves auditor’s independence. It won’t let the auditor to lose his auditing objectivity.
2.It can reduce the possibility of professional misconduct.
And as a result,
The rotation of audit partner helps to improve the audit quality.