Self-Study
4
Overview
Regulatory Ethics
There are no prerequisites.

Course Description

This course is designed to meet the four-hour Ethics CPE requirement for New York CPAs. It provides an overview of ethical thought, explaining the core values of the CPA profession and demonstrating the application of these values to ethical reasoning. Board of Regents Rules found in Title 8 of the New York Codes, Rules and Regulations, Chapter 1, Part 29.1 and 29.10 are covered in detail as well as certain administrative rules found in Title 8, Chapter 2, Part 70 and Title 8 of the New York Code, Article 149, Sections 7400-7410. The AICPA Code of Professional Conduct—as adopted by the New York State CPA Society—is also covered. Case studies are utilized throughout to emphasize material.

Approved by the New York State Board for Public Accountancy on September 1, 2017.

WesternCPE New York Sponsor License # 001353



Instructor

Joseph Helstrom, CPA

Joseph Helstrom, CPA, is a partner at CFO Resources, LLC, a company focused on training and courseware for CPAs. He’s also the owner of Mill Creek Publishing LLC. Joe has over 30 years of experience as a CPA in both public accounting and industry, with extensive experience in financial reporting and analysis, treasury, tax, information technology, legal and regulatory matters, and strategic planning.

After graduation from Butler University with a degree in accounting, Joe got his start at Ernst & Young. Subsequent to that, he has served for several different companies as a chief financial officer; director of treasury and tax; controller; and manager of financial planning, reporting, and analysis.

Joe and his wife, Patricia McCarthy, produce self-study courses for Western CPE and have published articles in Missouri and Texas CPA society publications titled “Incorporating Excel Arrays into Your Audit Plan.”



Course Specifics

Regulatory Ethics
Sep 13, 2017
There are no prerequisites.
SS4150630
163
None


Compliance Information

103220
Qualifies for CA Fraud: No


Learning Objectives

Upon successful completion of this course, participants will be able to:

  • Define ethics from an overall and professional perspective, noting the core ethical foundations for CPAs
  • Recognize the ethical standards contained in the New York Board of Regents rules, identifying specific requirements for work papers, competency for attest and compilation engagements, active registration,  reportable events, commissions and referral fees, contingent fees, independence, advertising, confidential information, firm names, and expressing an opinion
  • Cite ethical standards contained in the AICPA Code of Professional Conduct, identifying when independence could be impaired as well as discreditable acts
  • Specify applicable threats to compliance, identifying appropriate safeguards to diminish or eliminate threats


Table of Contents

Ethics and Professional Conduct for New York CPAs

Learning Objectives

Ethics Background

Morals

What Is Ethics?

The Relationship of Morals and Ethics

Alcohol

Nike

Summary

Illustrative Examples of Ethics

Professional Ethics

Legal versus Ethical

Why Should We Study Professional Ethics?

Accounting Ethics

Ethical Core Foundations for CPAs

Independence

Integrity

Objectivity

Public Interest

Due Care

Review Questions

Ethical Reasoning

Case Studies – Threats and Safeguards

Ethical Dilemmas

Public Expectations of the CPA’s Responsibility

Enron and Arthur Andersen

Motivations of Ethical Lapses

Review Questions

The Role of the Office of the Professions in New York

Enforcement of Rules on Ethics

The New York State Rules on Ethics—Rules of the Board of Regents

Retention and Maintenance of Work Papers

What are work papers?

What is the practice of public accountancy?

Documentation required to be maintained in work papers

When should work papers be complete and retained?

Minimum duration of retention and retention policy

What if work papers are altered?

Availability of work papers to the Department of Education

Competency Requirements for Attest and Compilation

Experience requirements for attest engagements

Continuing professional education requirements for attest and compilation engagements

Other requirements

Requirements imposed by Section 29.1

Failure to Maintain an Active Registration

Who is required to register?

What is inactive status?

Reportable Events

What are reportable events?

To whom and when must reporting occur?

What must the report contain?

What are exceptions from disclosure?

Commission and Referral Fees

What is a commission or referral fee?

If you perform attest services, are commission and referral fees prohibited forever?

Are there any exceptions to this rule?

What are the rules for commissions and referral fees when the client is not an attest client?

Comparison of NYS Laws, Rules, and Regulations Concerning Commissions and Referral Fees to the AICPA Code of Professional Conduct (adopted by the NYSCPAS)

1.520.001—Commissions and referral fees Rule

Contingent Fees

What is a contingent fee?

Exceptions to the contingent fee rule

Comparison of NYS Laws, Rules, and Regulations Concerning Contingent Fees to the AICPA Code of Professional Conduct (adopted by the NYSCPAS)

1.510.001 — Contingent Fees Rule

Independence

When is independence impaired?

Comparison of NYS Laws, Rules, and Regulations Concerning Independence to the AICPA Code of Professional Conduct (adopted by the NYSCPAS)

Advertising

What is unprofessional conduct in advertising under 29.1 (b) (12)?

What are the advertising retention requirements?

Other rules

Comparison of NYS Laws, Rules, and Regulations Concerning Advertising to the AICPA Code of Professional Conduct (adopted by the NYSCPAS)

1.600.001 – Advertising and Other Forms of Solicitation

Retention of Client Work Papers

Comparison of NYS Laws, Rules, and Regulations Concerning Retention of Client Work Papers to the AICPA Code of Professional Conduct (adopted by the NYSCPAS)

The AICPA Interpretation

Confidential Information

Is there also a general rule related to all NY State professions?

Comparison of NYS Laws, Rules, and Regulations Concerning confidentiality to the AICPA Code of Professional Conduct (adopted by the NYSCPAS)

1.700.001 – Confidential Client Information Rule

Income Sharing

Does 29.1 apply?

Other Unprofessional Conduct in the Practice of Public Accountancy

Failures in expressing an opinion on financial statements

Comparison of NYS Laws, Rules, and Regulations Regarding Failures in Expressing an Opinion on Financial Statements to the AICPA Code of Professional Conduct (adopted by the NYSCPAS)

1.130 Preparing and Reporting Information

Rule 1.300—General Standards Rule

1.310 Compliance with Standards Rule

1.320 Accounting Principles Rule

Use of Firm Name

Comparison of NYS Laws, Rules, and Regulations Regarding Use of Firm Name to the AICPA Code of Professional Conduct (adopted by the NYSCPAS)

1.800.001—Form of organization and name rule

Opinion and Examination Required

Comparison of NYS Laws, Rules, and Regulations Regarding Opinion and Examination to the AICPA Code of Professional Conduct (adopted by the NYSCPAS)

1.310 Compliance with Standards Rule

Admission of Guilt, Suspension, Failure to Meet Federal Standards

Other Applicable New York Regulatory Requirements—New York State Education Law

Firm Registration

Continuing Professional Education

Mandatory Quality Review

Case Studies

Bernard Madoff Investment Securities LLC—Failures in Expressing an Opinion on Financial Statements

A Little Extra Income—Contingent Fees

Audit Experts—Advertising and Audit Requirements

Adjusting Journal Entries—Work Paper Retention

Review Questions

The New York State CPA Society Rules on Ethics

The AICPA Code of Professional Conduct

About the Code

Preface

Part 1 – Members in Public Practice

Adverse interest threat

Advocacy threat

Management participation threat

Self-interest threat

Self-review threat

Undue influence threat

Rule 1.100 Integrity and Objectivity

Case Study – Married Tax Clients Divorcing

1.130 Preparing and Reporting Information

Case Study – Year End Adjustments and Loan Covenants

1.200 - Independence

Review Questions

Rule 1.300 – General Standards Rule

Case Study—Audit Engagement with No Prior Experience

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

Review Questions

Part 2 – Members in Business

Conceptual Framework Approach

Threats

Safeguards

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

Joint Ethics Enforcement Program (JEEP)

Overview

Complaint Receipt

Complaint Evaluation

Investigation Procedures

Automatic Discipline

Review Questions

Review Question Answers and Rationales

Appendix

Regulations of the Commissioner, Part 70

§70.1 Definition of practice of public accountancy.

§70.2 Professional study of public accountancy.

§70.3 Experience requirements.

§70.4 Licensing examinations.

§70.5 Licensure by endorsement.

§70.6 Limited permits.

§70.7 Practice by certain out-of-state individuals and firms.

§70.8 Registration of a firm.

§70.9 Continuing Education.

§70.10 Mandatory quality review program.

New York Code, Article 149, Sections 7400-7410

§7400. Introduction.

§7401. Definition of practice of public accountancy.

§7401-a. Definitions.

§7402. Practice of public accountancy and use of title "certified public accountant" or "public accountant".

§7403. State board for public accountancy.

§7404. Requirements for a license as a certified public accountant.

§7405. Requirements for a license as a public accountant.

§7406. Limited permits and practice privilege.

§7407. Exempt persons.

§7408. Special provisions.

§7409. Mandatory continuing education.

§7410. Mandatory quality review.

Rules of the Board of Regents, Part 29.1

§ 29.1 General provisions.

Rules of the Board of Regents, Part 29.10

§ 29.10 Special provisions for the profession of public accountancy.

Glossary

Index

Final Examination

Answer Sheet

Course Evaluation



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