Question

Exercises
Code of Conduct Exercises

Instructions:  Answer the following in complete sentences using the AICPA's revised Code of Conduct, providing the ET references for each of your responses. For questions with multiple parts, include multiple ET references as appropriate.

What are the three broad categories of safeguards identified in Part 1 of the Code, in the Conceptual Framework for members in public practice? Which category of safeguard cannot be relied upon, by itself, to reduce threats to an acceptable level?

Answer 1

The three broad categories of safeguards identified in Part of AICPA's code of Conduct are as below,

1.Safeguards created by the profession, legislation, or regulation.

Examples: a. Education and training requirements on independence and ethics rules

b. Continuing education requirements on independence and ethic rules

c. Profesional standard and threat of dicipline

2. Safeguards impemented by the client.

Examples: a. Policies and procedures are in place to address ethical conduct

b. The high level management emphasizes the client's commitment to fair financial reporting and compliance woth applicable laws,rules etc.,

3.Safeguards implemented by the firm,including policies and procedures to implement professional and regulatory requirements.

Examples: a. Policies and procedures that are designed to implement and monitor engegement quality control.

b. Internal policies and procedurs that are designed to monitor compliance with firm's policies and procedures.

Category 2 cannot be relied upon,by itself,to reduce threats to an acceptable level.