Ethical Conduct for Florida CPAs is designed to meet the four-hour Ethics CPE requirement for Florida CPAs. The course provides an overview of ethical thought, the core values of the CPA profession, and the application of these values to ethical reasoning. Chapters 455 and 473 of the Florida Statutes and the related administrative rules found in section 61H1 of the Florida Administrative Code are reviewed, as is the AICPA Code of Professional Conduct. Case studies are utilized throughout the course to emphasize material.
Approved by the Committee on Continuing Professional Education on August 23, 2017.
Note: A passing grade of 80% is required for this course.
Upon successful completion of this course, participants will be able to:
- Recognize the definitions of morals and ethics and the differences between each
- Recognize the characteristics of various threats in public practice and ways to evaluate threats and identify appropriate safeguards
- Recognize the ethical standards contained in the Florida Board of Accountancy rules and related Florida statutes
- Recognize the ethical standards contained in the AICPA Code of Professional Conduct
Table of Contents
Chapter 1 – Overview
What is Ethics?
The Relationship of Morals and Ethics
Illustrative Examples of Ethics
Legal vs. Ethical
Why Should We Study Professional Ethics?
Ethical Core Foundations for CPAs
Other Ethical Foundations of the CPA Profession
Chapter 1 – Review Questions
Chapter 2 – Ethical Threats & Safeguards
Case Studies – Threats and Safeguards
Example Thought Process
Example Thought Process
Case Studies of Ethical Lapses
Ethical Lapses of Andersen
Questions for Consideration
The Travel Expense Department
Ethical Lapses of the Travel Expense Department Manager
Question for Consideration
Motivations of Ethical Lapses
Questions for Consideration
Chapter 2 – Review Questions
Chapter 3 – Florida State Board of Accountancy Rules and Related Florida Statutes
The Florida State Board of Accountancy Rules
Summary of Changes to the Florida State Board of Accountancy Rules and Florida Statutes in 2015 and 2016.
“Attest as an Expert in Accountancy to the Reliability or Fairness of Presentation” or “Expression of Opinion.”
61H1-20.005 Financial Statements.
61H1-20.0051 Assembled Financial Statements.
Offer to Perform or Perform Services Involving Assembled Financial Statements.
61H1-20.0053 Standards for Assembled Financial Statements.
61H1-20.007 Generally Accepted Accounting Principles. (Repealed)
61H1-20.008 Generally Accepted Auditing Standards. (Repealed)
61H1-20.009 Standards for Accounting and Review Services. (Repealed)
61H1-20.0092 Government Auditing Standards. (Repealed)
61H1-20.0093 Rules of the Auditor General.
61H1-20.0095 Standards for Consulting Services. (Repealed)
61H1-20.0096 Services for Tax Practice. (Repealed)
61H1-20.0097 Standards for Personal Financial Planning. (Repealed)
61H1-20.0098 Standards for Business Valuations. (Repealed)
61H1-20.0099 Standards for Attestation Engagements. (Repealed)
61H1-20.016 Non-CPA Shareholders, Partners, and Members.
Section 101-1. Independence-General Provisions
Application of the Independence Rules to Covered Licensees Formerly Employed by a Client or Otherwise Associated With a Client
Application of the Independence Rules to a Covered Licensee’s Immediate Family
Section 101-2. Employment or Association with Attest Clients
Considering Employment or Association with the Client
Section 101-3. Reserved
Performance of nonattest services.
Engagements Subject to Independence Rules or Certain Regulatory Bodies.
General Requirements for Performing Nonattest Services
Specific Examples of Nonattest Services
Internal Audit Assistance Services
Honorary Directorships and Trusteeships of Not-For-Profit Organization.
Section 101-5. Permitted Loans
Other Permitted Loans
Section 101-6. The Effect of Actual or Threatened Litigation on Independence.
Litigation between client and licensee
Other third-party litigation
Effects of impairment of independence
Termination of impairment
Effect on Independence of Financial Interests in Nonclients Having Investor or Investee Relationships with a Covered Licensee's Client.
Section 101-9. Reserved
The Effect on Independence of Relationships with Entities Included in the Governmental Financial Statements.
Auditor of Financial Reporting Entity
Section 101-11. Reserved
Section 101-12. Independence and Cooperative Arrangements with Clients.
Independence Case Study
61H1-21.002 Integrity and Objectivity.
Integrity and Objectivity Case Study
61H1-21.003 Commissions or Referral Fees.
61H1-21.005 Contingent Fees.
Contingent Fee Case Study
61H1-21.006 Communication with Client of Another Certified Public Accountant.
61H1-22.001 Competence (General Standards).
General Standards Case Study
61H1-23.001 Confidential Client Information.
61H1-23.002 Records Disposition Responsibility.
Advertising Case Study
61H1-24.002 Solicitation. (Repealed)
61H1-25.001 Responsibility for Other Persons.
61H1-26.001 Form of Practice and Name-Shared Office Space.
Minimum Capitalization or Adequate Public Liability Insurance for Florida Firms with the Exception of a Sole Proprietorship.
61H1-26.003 Licensure of Florida Certified Public Accountant Firms.
61H1-26.004 Changes by Firms.
61H1-26.005 Address of Record.
61H1-33.001 Certified Public Accountants Required to Comply with this Chapter.
61H1-33.002 Organization and Administration.
61H1-33.003 Continuing Professional Education.
61H1-33.0031 Continuing Professional Education/Ethics.
61H1-33.0032 Board Approval of CPA Ethics Continuing Education by Providers.
61H1-33.0033 Obligations of CPA Ethics Course Continuing Education Providers.
61H1-33.0034 Evaluation of CPA Ethics Course Providers.
61H1-33.00341 Duration of CPA Ethics Course Provider Status.
61H1-33.00342 CPA Ethics Courses – Standards for Approval of Courses.
61H1-33.0035 Continuing Professional Education/Governmental Auditing.
Inactive or Delinquent Florida Certified Public Accountants Who Desire to Become Active Licensees.
Exemption from Renewal Requirements for Spouses of Members of the Armed Forces of the United States.
Preparation of Financial Statements by Persons Other than Certified Public Accountants or Inactive Certified Public Accountants.
61H1-34.002 Notice to Public by Non-Licensed Persons.
61H1-36.002 Return of Certificates or Licenses.
61H1-36.003 Time for Payment of Civil Penalties. (Repealed)
Disciplinary Guidelines; Range of Penalties; Aggravating and Mitigating Circumstances.
61H1-36.0055 Minor Violation, Notice of Non-Compliance.
61H1-39.002 Peer Review Program Standards.
61H1-39.003 Peer Review Administering Entities.
61H1-39.004 Peer Review Oversight Committee Composition and Responsibilities.
61H1-39.005 Compliance with Peer Review Requirements.
Chapter 3 – Review Questions
Chapter 455 Florida Statutes
455.224Authority to issue citations.
455.2255Classification of disciplinary actions.
455.227Grounds for discipline; penalties; enforcement.
Failure to Report to the Board Case Study
455.2275Penalty for giving false information.
455.2277Prosecution of criminal violations.
Unlicensed practice of a profession; cease and desist notice; civil penalty; enforcement; citations; allocation of moneys collected.
455.2281Unlicensed activities; fees; disposition.
Annual report concerning finances, administrative complaints, disciplinary actions, and recommendations.
455.2286Automated information system.
Public inspection of information required from applicants; exceptions; examination hearing.
455.232Disclosure of confidential information.
Chapter 473 Florida Statutes
473.303Board of Accountancy.
473.3035Division of Certified Public Accounting.
473.304Rules of board; powers and duties; legal services.
Clay Ford Scholarship Program; Certified Public Accountant Education Minority Assistance Advisory Council.
Practice requirements for partnerships, corporations, and limited liability companies; business entities practicing public accounting.
Licensure of firms or public accounting firms.
473.311Renewal of license.
473.3141Certified public accountants licensed in other states.
473.315Independence, technical standards.
473.316Communications between the accountant and client privileged.
473.318Ownership of working papers.
473.3205Commissions or referral fees.
Overall Case Study – 61H1 F.A.C. and Chapters 455 and 473 F.S.
Chapter 3 – Review Questions
Chapter 4 – AICPA Code of Professional Conduct
The AICPA Code of Professional Conduct
About the Code
Part 1 – Members in Public Practice
Adverse interest threat
Management participation threat
Undue influence threat
Rule 1.100 Integrity and Objectivity
Case Study – Married Tax Clients Divorcing
1.130 Preparing and Reporting Information
Case Study – Bernard Madoff Investment Securities LLC
Case Study – Phar-Mor
1.200 – Independence
Rule 1.300—General Standards Rule
1.310 Compliance with Standards Rule
Case Study – Peer Review Discoveries
1.320 Accounting Principles Rule
1.400.001 Acts Discreditable Rule
1.510.001 – Contingent Fees Rule
1.520.001 – Commissions and referral fees Rule
1.600.001 -- Advertising and other forms of solicitation
1.700.001 – Confidential client information rule
1.800.001 – Form of organization and name rule
Part 2 – Members in Business
Conceptual Framework Approach
2.100.001 – Integrity and Objectivity Rule
2.130.030 Obligation of a Member to His or Her Employer’s External Accountant
Case Study – Fair Finance
2.300.001 – General standards rule
2.310.001 – Compliance with standards rule
2.320.001 – Accounting principles rule
Case Study – The Company with Excess Reserves
Case Study – The Company with Undisclosed/Unrecorded Contingencies
2.400.001 – Acts Discreditable Rule
2.400.070 – Confidential Information from employment or volunteer activities
Part 3 – Other Members
3.400.001 – Acts Discreditable Rule
3.400.070 – Confidential Information from Employment or Volunteer Activities
Chapter 4 – Review Questions
Review Question Answers and Rationales
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