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Hello, Its me again, and I need your help. Sorry for short notice. Thanks in advance 1. Do you agree with the authors that a

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Hello,

Its me again, and I need your help. Sorry for short notice.

Thanks in advance

image text in transcribed 1. Do you agree with the authors that a code of ethics should do more than stablish minimum acceptable standards? Why? Or Why not? Yes I agree that a code should do more than stablish minimum acceptable standards. The minimum acceptable standards allow accountants and management the use of loopholes and technical exceptions, as a result they have financial statements that are in compliance with GAAP, but do not provide a fair representation of the company in an ethical way. This situation serves as camouflage to problems that could be resolved if the accountant proceeds in an ethical manner but there is not such rule for this case because there are only minimum standards therefore there is no consequence to this act. Stablishing more than minimum standards helps to keep discipline in the profession and helps the accountants to understand the values and aspirations related to ethics in every situation in a very clear manner, it also inspires accountants to move forward with moral excellence, and most importantly to protect those who do the right thing. Whenever a code of ethics does not have enough rules to specify behavior in different situations then the accountants would get into the habit of making decisions by themselves and not necessarily be under a code of ethics. 2. Describe the five cardinal virtues of professional accountants that the article's authors discuss. a) Integrity: Inside this cardinal virtue there are two elements: the honesty which means the accountant has to be honest in his communication with the client and the second is the courage which means the accountant has to have the bravery to tell the true when the recipient is expecting a different message. The integrity of the information is very important because dishonest information can result in false financial information; in addition the accountant has to be very careful with the amount of information that he disclosures about the client because this information can be hurtful for the client's business. To conclude an accountant has to find the proper balance between transparency and improper disclosure which requires a certain amount of skill and wisdom. b) Objectivity: The objectivity is when the accountant complies with his work with the standards in a technical and ethical way. In the ethical aspect the accountant has to assure that the work was made under the ethical standards, at least to the best knowledge and belief of the accountant. In other words the judgment of the accountant cannot be subordinated to other interests except to comply with GAAP and IFRS; the objectivity imposes an obligation on all accountants to not compromise their professionalism or business judgment because of conflict of interest or the undue influence of others. The accountant reaches true objectivity when he finds a balance between noncompliance and over legalistic compliance with the standards. c) Diligence: The diligence can be expressed as how the accountant performs his job being aware of all aspects and ready to identify, sort, prioritize and address red flags that signal potential weakness, fraud, or other problems within the accounting information system. In other words, the accountant is required to ensure that their work reflects professional competence as well as knowledge and skills. Being a careful professional that shows good judgment, planning and supervisory skills, as well as being capable of gathering sufficient relevant data while being tough, prudent and transparent in the performance of the accounting services. d) Loyalty: An accountant is loyal when he or she keeps confidentiality of the client or employer's information. This due to confidentiality is not broken when the accountant performs his professionals' activities keeping integrity, objectivity, and diligence. There are some cases when the accountants have to use their judgment to disclose the client's information; the accountant should take in account the interest of all parties, the type of communication involved, and the extent of the disclosure to the appropriate parties / recipients. e) Professional behavior: The Professional behavior requires for an accountant to behave with integrity, objectivity, diligence, and proper notions of loyalty. To explain this in a graphic way, an accountant who works in attestation services with professional behavior will show independence, honesty and loyalty. All these traits make the accountant trustful and credible creating a close relationship with the client. The independence is key within the professional behavior; when an accountant can perform a perfect job but the closeness that he or she develops during the job with the client or employer can sabotage the credibility of the accountant and the quality of the performed job. To conclude, the accountant is not required to have a perfect life however he or she should be mindful of their profession and keep a good professional reputation and credibility because this type of behavior will show how the accountant is capable of handling difficult situations with professionalism. f) Integrity: Inside this cardinal virtue there are two elements: the honesty which means the accountant has to be honest in his communication with the client. And the second is the courage which means the accountant has to have the courage to tell the true when the recipient is expecting a different message. The integrity of information is very important because very dishonest information can result in false financial information, in addition the accountant has to be very careful with the amount of information that he disclosures about the client because this information can be hurtful for the client's business. To conclude an accountant has to find the proper balance between transparency and improper disclosure requires a certain amount of silk and widow. g) Objectivity: The objectivity is when the accountant complies his work with the standards in a technical and ethical way. In the ethical aspect the accountant has to assure that the work was made under the ethical standards at least to the best knowledge and belief of the accountant. In other words the judgment of the accountant cannot be subordinated to other except to comply with GAAP and IFRS; the objectivity imposes an obligation on all professional accountant to not compromise their professional or business judgment because conflict of interest or the undue influence of others. When the accountant finds a balance between a noncompliance with standards and legalist so the accountant reaches the objectivity. h) Diligence: The diligent can be express on how the accountant performs his job being aware and ready to identified, sort prioritized, and address red flags that signal potential weakness, fraud, or other problems within accounting information system. In other words the accountant are required to ensure that their work reflecting professional competence as a professional knowledge and skills, due professional to the care as a showing a good judgment, planning and supervision, gathering of sufficient relevant data, being toughness, timeless, carefulness, prudent and having performance of the accounting services. transparency in the i) Loyalty: An accountant is loyal when he or she keeps confidentiality of the client or employer's information. This due to the confidentiality is not broken while the accountant performs his professionals' activities keeping integrity, objectivity, and diligence. There are some cases when the accountants has to use the judgment to disclose the employee client's information, the accountant should take in account the interest of all parties, the type of communication involve, and the extent to which parties to whom communication involved is address are appropriated recipients. j) Professional behavior: The Professional behavior required for an accountant will behave with integrity, objectivity, diligence, and proper notion of the loyalty. To explain this in a graphic way an accountant who works in attestation services a professional behavior will be independence, honesty, and loyalty. All this behaviors make the accountant trustfully and credible creating a closeness relationship with the client and the virtuousness of the accountant will not matter. In the professional behavior the independence is a key, when an accountant can performance a perfect job but the closeness that he or she development during the job with the client or employee can sabotage the credibly of the accountant and the quality of the job performed. To conclude the accountant has not to have a perfect life however requires the he or she be mindful of their professional reputation and credibility of the accounting profession because the behavior shown and how the difficult situations are handle that it is what is going to be reflect it as his or he professionalism. 3. We've talked about rules-based versus principles-based accounting standards. Should we have rules-based ethics standards? Why or why not? Should they tell you exactly what to do in specific ethical situations? According to the many resources I have researched, my personal opinion is that an ethics standards code has to be a mix between rules and principles because this is how it works in real life. A Code is a list of rules that are based in principles which we hope are going to protect everybody's interest (stockholder, companies and accountants) in moments of confusion and indecision. The secret is to find the balance where the guidance that the code provides is not going to undermine the exercise of the accountant judgment. There are several reasons why the code should not only be rules for example, there will not ever be enough rules to cover every single ethical situation, some of the rules are so complex that can allow \"exceptions or loopholes\" having as a result manipulation of the ethics. Rules tent to conflict; creating more rules could originate new conflicts between them. All rules need interpretation, the rule makes the accountant think in terms of what we do and not who we are. By keeping the rules mixed with principles we can take advantage of the benefits of the rules because basically a rule is a specific way to understand the difference between what is good and what is wrong; in addition it shows the expected behavior in some situations. Rules help draw guidelines or synopses of cumulative moral experience and wisdom and can clarify fundamental issues at stake in a practical problem. In conclusion, the principles provide the framework for the rules which is the ideal corrected behavior for the accountants; in addition the rules add the details to the aspirations avoiding the generality of the principles that could bring many interpretations and scads of the abuses. http://www.icaew.com/en/technical/ethics/ethics-in-business/generalethics/principles-versus-rules-debate 4. Compare and contrast the AICPA's Code of Professional Conduct and the IFAC Code of Ethics for Professional Accountants. IFAC code uses a conceptual framework approach to evaluate ethical conduct and requires in many situations that accountants exercise judgment to identify and analyze threats to their independence and apply appropriate safeguards to eliminate these threats or reduce them to an acceptable level. In some occasions this framework is not enough to mitigate the threat to an acceptable level so certain prohibitions in form of rules are imposed. In contrast, AICPA members are only required to adopt this approach if the rule does not address the situation. IFAC is a code made under principles-bases, and AICPA is a rule-based code. Regardless of their composition they do have more similarities than differences, some of the differences are for example that the AICPA code does not make division of its rules and principles meanwhile IFAC does divide the code in 3 parts. In addition AICPA code is stricter than IFAC because AICPA has more rules limiting the independence of what the accountant should or should not do. The IFAC code addresses most the same areas of the AICPA as for example objectivity, independence, due to care, confidentiality and reporting. AICPA code dictates as how members in public practice may structure and name their accounting practices and describes several discernible acts that violate the code; the IFAC code does not do this. Both codes cover prohibitions to guard against the loss of independence. Basing their independence standards on the conceptual framework approach, beginning by determining if a provision in the code directly addresses the situation with a specific requirement; if the answer is NO then they analyze the threats to the independence and extend some safeguards that are available to eliminate those threats or reduce them to an acceptable level. The IFAC code stablishes additional independence provisions for public entities and also for entities with auditors who are required by law to comply with the same independence required for public entities such as long association of senior personnel with audit client, bookkeeping payroll services, valuations services, tax calculation, internal audit services, information technology system, recruitment services, and significate client fees. In contrast AICPA rules do not include these provisions but the AICPA code requires complying with more restrictive rules applicable to their engagement as for example the SEC rules which is going to bring a similar result to the IFAC provisions. In addition, the IFAC code splits the independency requirement in two sections; one provides the strongest proscription and applies an audit and review of the financial statements and the second one provides general independence standards for all other assurance engagements. The AICPA does not include this standards however there is a certain restricted used report issued under the Statements or Standards for attestation Engagements (SSAEs) which applies only to financial statements audit and review engagement

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