In short
Under the conceptual framework in the American Institute of Certified Public Accountants' Code of Professional Conduct, members identify threats to compliance with the rules, evaluate their significance and apply safeguards to eliminate or reduce them to an acceptable level.
Key takeaways
- The threats are adverse interest, advocacy, familiarity, management participation, self-interest, self-review and undue influence.
- Safeguards can come from the profession, the firm or the client.
- If no safeguards are enough, the member declines or ends the engagement.
Where it's tested
AUD: Professional Ethics & Independence — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
The AICPA Code's conceptual framework approach should be applied when: