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Code of Ethics - Coggle Diagram

- - - - the distinguishing mark of the accountancy profession is its acceptance of its responsibilities to act in the (to meet) PUBLIC INTEREST which is collective well being of a community of people and institutions the CPA serves (to emphasize na hindi mekus mekus ang gawa ng mga CPA)
        
        4 basic needs to meet PUBLIC INTEREST (CPCQ)
        
        Confidence - users of the reports should feel confident by using the work of professional
        
        Quality of services - rendered by professionals
        
        Professionalism - expert individuals
        
        Credibility - reliable info. of stakeholders
      - All recognized professionals developed codes of professional ethics
        
        Characteristics of a profession
        
        Mastery - acquired by training/educ
        
        adherence - to common code of values and conduct; and
        
        acceptance - of a duty to society as a whole
      - The professions attempt to achieve a number of common interests by its observance of certain fundamental principles for that purpose
  - - - Workgroups assigned each to review standards
      - Discussion papers
      - Exposure drafts
        
        Voting: FSRSC - majority; AASC majority
        
        exposure period: FSRSC AT LEAST 60 days, can down up to 30 days; AASC AT LEAST 90 DAYS, CANNOT BE LOWER
      - Public (stakeholders) - wherein they can provide comments/commentary
      - Final draft
        
        voting: FSRSC - majority; AASC AT LEAST 10 MEMBERS
      - BOA for approval
  - - - Fundamental principles - COBID
      - Conceptual framework
      - Individual Independence Standards
- - - - Evaluate the significance/impact by judgment
      - Actions available to adress the consequences; and
      - Determine whether to Report relevant parties (affected parties)
  - - - comply with relevant LAWS AND REGULATIONS, avoid ANY CONDUCT THAT KNOWS OR SHOULD MIGHT DISCREDIT PROFESSION
    - - AVOID PEOPLE without integrity, because ganon na din magiging tingin sayo ng mga tao (kaya before engagement tinitignan muna kung may integrity yung client or wala)
      - DO NOT BE ASSOCIATED with INFO. that lacks integrity
    - - not to compromise professional/business JUDGMENT because of
        
        bias
        
        conflict of interest
        
        undue influence (e.g superiority of your boss)
        
        undue reliance on individual, org, technology
    - - to act diligently and in accordance with applicable technical and professional service
      - maintain professional knowledge and skill (tanggapin lang IF KAYA MO), except if it really needs expert with specialized skill
        
        assumption: ALL CPAs are competent, pantay pantay lahat
      - stages
        
        attainment of professional competence
        
        maintenance
    - - XPN
        
        acted with consent
        
        legal requirement, to protect himself
        
        for quality review purpose
      - respect the confidentiality of info. acquired, and it shall continue even after end of relationship
  - - - Self review
        
        will not appropriately evaluate the results of a previous judgment made (ikaw gumawa, ikaw din magrereview)
        
        client to firm
      - Advocacy
        
        promote client's/employing org's position to the point that accountant's objectivity is compromised (e.g providing legal services (lawyer) as the same time auditor)
      - Self interest
        
        financial/other interest that inappropriately affect PAs behavior
      - Familiarity
        
        due to long relationship with client/employing organization, will be sympathetic to their interest or too accepting of their work
      - Intimidation
        
        deterred from acting objectively because of actual/perceived pressure or undue influence
    - - Identify threats to compliance of FP
      - Evaluate threats identified (significance/likelihood)
      - Address threat by
        
        eliminating (by not engaging)
        
        reducing them to acceptable level (leave job/rotation
    - - have inquiring mind
      - professional judgment
      - use reasonable and informed 3rd party test (as if ikaw 3rd party)
    - - review significant judgments made/conclusion
      - use reasonable mind and informed 3rd party test
    - - Confirmation - more weight on exixting belief (e.g election)
      - Groupthink - discouraging individual creativity & responsibility, reaching decision without critical reasoning
      - Availability
      - Overconfidence - overestimating one's ability
      - Automation - dependent on automated system than human info.
      - Representation - pattern of experience/events
      - Selective - person's expectation, if against sa paniniwala mo hindi mo papansinin; if hindi, papansinin mo
      - Anchoring - tendency to use INITIAL piece of info. as an anchor (unang info. lang basehan)
- - - - Engagement period and period covered by FS
  - - - with aud client - not permitted unless immaterial
      - with aud client that is a bank or similar institution - not permitted unless ordinary course of business
      - with aud client that is not a bank or similar institution - not permitted unless immaterial
    - - direct - dapat idispose muna before pwede iaccept engagement
      - indirect - impaired ang interest kapag material, if immaterial - acceptable
    - - overdue fees - bago irelease yung report
      - contingent fees - bawal icharge
      - relative size - not higher/not lower
  - - - 7-year "time-on period" - key audit partner roles are not allowed for a period > 7 cumulative years (total, no need na sunod sunod)
      - after 7 year time on period, the individual shall serve a cooling off period as follows?
        
        Other role - 2 years
        
        Engagement Quality Control Reviewer - 3 years
        
        Engagement partner - 5 year cool off
        
        if 2 different roles, yung ginampanan niya, kung ano pinakamahaba yun magiging basis for years ng cooling off
    - - firm shall determine appropriate period to address threats (judgment)
  - - - Communicate in accordance with its policies and proceduress
      - Evaluate significance of breach and its impact on firm's objectivity and ability to issue an aud report; and
      - Consider whether any legal requirements apply to the breach
      - Depending on significance, whether:
        
        end aud engagement; or
        
        take action that address consequences
      - End, suspend, eliminate the interest/relationship
- - - - obtain understanding
      - communicate within organization
      - consider communicate to appropriate authority
- - - - Audit services
        
        Obtaining UNDERSTANDING
        
        ADDRESSING the matter
        
        COMMUNICATE with respect to groups
        
        Becoming AWARE of the matter
        
        Determining whether further ACTION is needed
        
        Determining whether to DISCLOSE to appropriate authority
        
        DOCUMENTATION
      - Non-audit
        
        3, ADDRESSING to MGT and TCWG
        
        COMMUNICATE to external auditor
        
        UNDERSTANDING
        
        Determine ACTION
        
        AWARE
        
        Seek ADVICE
        
        DOCUMENTATION