The CPA Pr !essi n " Pr !

essi nal Ethics

Cha#ter 2

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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$earning %b&ecti'e 1
(escribe the nature ! CPA !ir)s, *hat they d , and their structure+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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Certi!ied Public Acc unting -ir)s

The legal right t #er! r) audits is granted t CPA !ir)s by regulati n ! each state+ CPA !ir)s als #r 'ide )any ther ser'ices t their clients, such as ta. and c nsulting ser'ices+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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Certi!ied Public Acc unting -ir)s

Big - ur internati nal !ir)s
PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young, and KPMG

0ati nal !ir)s

KAP Purwantono, Sarwo o, Sand!a!a " a##iliate o# Ernst & Young$ KAP %sman &ing Satrio " a##iliate o# Deloitte$ KAP Sidharta, Sidharta, 'id!a!a " a##iliate o# KPMG$ KAP (ar)anto Sahari " a##iliate o# PwC

1egi nal and large l cal !ir)s 2)all l cal !ir)s

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 2-/

Certi!ied Public Acc unting -ir)s

The ! ur largest CPA !ir)s in the 4nited 2tates are called the 5Big - ur6 internati nal CPA !ir)s+ These ! ur !ir)s ha'e !!ices in ) st )a& r cities in the 4nited 2tates and in )any cities thr ugh ut the * rld+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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Acti'ities ! CPA -ir)s

Acc unting and b Ta. ser'ices 8anage)ent c nsulting ser'ices 99ee#ing ser'ices

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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2tructure ! CPA -ir)s

Three )ain !act rs in!luence the rgani;ati nal structure ! all !ir)s< 1+ The need ! r inde#endence !r ) clients+ 2+ The i)# rtance ! a structure t enc urage c )#etence+ ,+ The increased litigati n ris9 !aced by audit rs+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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%rgani;ati nal 2tructure

Pr #riet rshi# Pr !essi nal c r# rati n =eneral #artnershi# $i)ited liability c )#any =eneral c r# rati n $i)ited liability #artnershi#

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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Hierarchy ! a Ty#ical CPA -ir)

2ta!! $e'el E.#erience Ty#ical 1es# nsibilities 2ta!! assistant 2eni r r in-charge audit r 0-2 years Per! r)s ) st ! the detailed audit * r9 1es# nsible ! r the audit !ield * r9, including su#er'ising sta!! * r9
2->

2-3 years

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

Hierarchy ! a Ty#ical CPA -ir)

2ta!! $e'el E.#erience Ty#ical 1es# nsibilities 8anager Hel#s the #lan, )anages 3-10 years the audit, re'ie*s * r9, and * r9s *ith the client 10? years 1e'ie*s audit * r9 and )a9es signi!icant audit decisi ns
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Partner

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

E-C ))erce and CPA -ir) %#erati ns

CPA !ir)s are using the @nternet t )ar9et their ser'ices+ -ir) Aeb sites als !eature nline s !t*are t and databases t subscribers+ ls

-ir)s ta9e ad'antage ! nline res urces and databases t hel# their sta!!s stay current n e)erging business and standards-setting issues+
2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 2 - 11

$earning %b&ecti'e 2
4nderstand the r le ! the Public C )#any Acc unting %'ersight B ard and the e!!ects ! the 2arbanes-%.ley Act n the CPA #r !essi n+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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2arbanes-%.ley Act
This Act is c nsidered by )any bser'ers t be the ) st i)# rtant legislati n a!!ecting the auditing #r !essi n since the 1>,0s+ The #r 'isi ns ! the Act a##ly t #ublicly held c )#anies and their audit !ir)s+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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2arbanes-%.ley Act
2EC

PCA%B BPublic C )#any Acc unting %'ersight B ardC

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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2arbanes-%.ley Act
The PCA%B c nducts ins#ecti ns ! registered acc unting !ir)s and assess their c )#liance *ith the rules ! the PCA%B and the 2EC+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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$earning %b&ecti'e ,
2u))ari;e the r le ! the 2ecurities and E.change C ))issi n in acc unting and auditing+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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2ecurities and E.change C ))issi n

The 'erall #ur# se ! the Securities and E*change Commission +SEC, is t assist in #r 'iding in'est rs *ith reliable in! r)ati n u# n *hich t )a9e in'est)ent decisi ns+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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2ecurities and E.change C ))issi n

Form S-1 Form 8-K Form 10-K Form 10-Q

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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$earning %b&ecti'e /
(escribe the 9ey !uncti ns #er! r)ed by the A@CPA+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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A@CPA
The A@CPA sets #r !essi nal reDuire)ents ! r CPAs, c nducts research, and #ublishes )aterials n )any di!!erent sub&ects related t acc unting, auditing, attestati n and assurance ser'ices, )anage)ent c nsulting ser'ices, and ta.es+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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Establishing 2tandards and 1ules

The A@CPA is e)# *ered t set standards BguidelinesC and rules that all )e)bers and ther #racticing CPAs )ust ! ll *+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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Establishing 2tandards and 1ules

1+ Auditing standards 2+ C )#ilati n and re'ie* standards ,+ %ther attestati n standards /+ C nsulting standards 3+ C de ! Pr !essi nal C nduct
2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 2 - 22

%ther A@CPA -uncti ns

Arites and grades the CPA e.a)inati n+ 2u## rts research by its *n sta!! and #r 'ides grants t thers+ Publishes a 'ariety ! )aterials+ Pr 'ides se)inars and educati n in a 'ariety ! sub&ect )atters+
2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 2 - 2,

Eisi n ! r the -uture

The A@CPA has established the CPA Eisi n Pr &ect t #r 'ide a c re #ur# se and a 'isi n ! r the CPA #r !essi n in the year 2011 and bey nd+ The c re #ur# se ! the CPA Eisi n Pr &ect is< 5CPAsF)a9ing sense ! a changing and c )#le. * rld+6

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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Eisi n ! r the -uture

1+ C ntinuing educati n and li!e-l ng learning 2+ C )#etence ,+ @ntegrity /+ Attuned t br ad business issues 3+ %b&ecti'ity

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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$earning %b&ecti'e 3
4se generally acce#ted auditing standards as a basis ! r !urther study+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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=eneral 2tandards
1+ The audit is t be #er! r)ed by a #ers n r #ers ns ha'ing adeDuate technical training and #r !iciency as an audit r+ Audit hrs dilaksanakan oleh seseorang/ lebih yg memiliki keahlian & elatihan teknis yg !uku sbg auditor 2+ The audit r )ust )aintain inde#endence in )ental attitude in all )atters relating t the audit+ "alam semua hal yang berhubungan dengan erikatan, inde endensi dalam sika mental harus di ertahankan oleh auditor

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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=eneral 2tandards
,+ The audit r )ust e.ercise due #r !essi nal care in the #er! r)ance ! the audit and the #re#arati n ! the re# rt+
"alam elaksanaan audit dan enyusunan la orannya, auditor #a$ib menggunakan kemahiran ro%essionalnya dengan !e at dan seksama

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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2tandards ! -ield A r9
1+ The audit r )ust adeDuately #lan the * r9 and )ust #r #erly su#er'ise any assistants+ &eker$aan hrs diren!akanan sebaik-baiknya dan $ika digunakan asisten harus disu er''isi dengan semestinya 2+ The audit r )ust btain a su!!icient understanding ! the entity and its en'ir n)ent, including its internal c ntr l, t assess the ris9 ! )aterial )isstate)ent and t design !urther Audit #r cedures+ &emahaman memadai ats engendalian intern hrs di eroleh untuk meren!anakan audit dan menentukan si%at, saat dan lingku engu$ian yang hrs dilakukan
2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 2 - 2>

2tandards ! -ield A r9
,+ The audit r )ust btain su!!icient a##r #riate audit e'idence by #er! r)ing audit #r cedures t a!! rd a reas nable basis ! r an #ini n regarding the !inancial state)ents under audit+
(ukti audit kom eten yang !uku harus di eroleh melalui ins eksi, engamatan, ermintaan keterangan dan kon%irmasi sebagai dasar memadai untuk menyatakan enda at atas la oran keuangan yang di audit

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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2tandards ! 1e# rting

1+ The re# rt shall state *hether the !inancial state)ents are #resented in acc rdance *ith generally acce#ted acc unting #rinci#les+ )a oran Audit harus menyatakan a akah )K telah disusun sesuai dgn standard akuntansi yg berlaku umum di *ndonesia 2+ The re# rt shall identi!y th se circu)stances in *hich such #rinci#les ha'e n t been c nsistently bser'ed in the current Peri d in relati n t the #receding #eri d+ )a + Auditor hrs menun$ukkan, $ika ada, ketidak konsistenan enera an Standar Akuntansi dlm )K eriode ber$alan dg enera an Standar Akuntansi dlm )K eriode sblm-nya
2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 2 - ,1

2tandards ! 1e# rting

,+ @n! r)ati'e discl sures in the !inancial state)ents are t be regarded as reas nably adeDuate unless ther*ise stated in the re# rt+ &engungka an in%ormati% dlm )K hrs di andang memadai, ke!uali dinyatakan lain dalam )a + Auditor /+ The re# rt shall c ntain an e.#ressi n ! #ini n regarding the !inancial state)ents, ta9en as a *h le+ )a + Auditor hrs memuat suatu ernyataan enda at mengenai )K se!ara keseluruhan atau suatu asersi bah#a suatu ernyataan tertentu tidak da at diberikan
2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 2 - ,2

=enerally Acce#ted Auditing 2tandards

=eneral 2tandards 1+ AdeDuate training and #r !iciency 2+ @nde#endence in )ental attitude ,+ (ue #r !essi nal care

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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=enerally Acce#ted Auditing 2tandards

2tandards ! -ield A r9 1+ Pr #er #lanning and su#er'isi n 2+ 4nderstanding ! the entity ,+ 2u!!icient a##r #riate e'idence

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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=enerally Acce#ted Auditing 2tandards

2tandards ! 1e# rting 1+ 2tate)ents #re#ared in acc rdance *ith =AAP 2+ Circu)stances *hen =AAP n t ! ll *ed ,+ AdeDuacy ! discl sures /+ E.#ressi n ! #ini n n !inancial state)ents

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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1elati nshi# Bet*een =AA2 and PCA%B Auditing 2tandards

The ter) generally acce#ted auditing standards is n l nger used ! r #ublic c )#any audits+ The ter) =AA2 c ntinues t be used ! r audits ! #ri'ate c )#anies+ Public c )#any audits re!er t PCA%B auditing standards+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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2tate)ents n Auditing 2tandards

The 10 generally acce#ted auditing standards are t general t #r 'ide )eaning!ul guidance+ 2A2s inter#ret the 10 generally acce#ted auditing standards and are the ) st auth ritati'e re!erences a'ailable t audit rs+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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2tate)ents n Auditing 2tandards

Classi!icati n ! 2tate)ents n Auditing 2tandards =AA2 and 2tandards ! Per! r)ance

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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$earning %b&ecti'e 7
(iscuss the r le ! internati nal auditing standards+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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@nternati nal 2tandards n Auditing

@nternati nal 2tandards n Auditing B@2AsC are issued by the @nternati nal Auditing Practice C ))ittee ! the @nternati nal -ederati n ! Acc untants B@-ACC+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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@nternati nal 2tandards n Auditing

@-AC is the * rld*ide rgani;ati n ! r the acc untancy #r !essi n+ The @-AC * r9s t i)#r 'e the uni! r)ity ! auditing #ractices and related ser'ices thr ugh ut the * rld+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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$earning %b&ecti'e :
@denti!y Duality c ntr l standards and #ractices *ithin the acc unting #r !essi n+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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Ele)ents ! Guality C ntr l

@nde#endence, integrity, and b&ecti'ity Pers nnel )anage)ent Acce#tance and c ntinuati n ! clients and engage)ents Engage)ent #er! r)ance 8 nit ring
2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 2 - /,

1elati nshi#s
Guality c ntr l standards =enerally acce#ted auditing standards

A@CPA #ractice secti ns

Peer re'ie*

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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0eed ! r Ethics
Ethical beha'i r is necessary ! r a s ciety t !uncti n in an rderly )anner+ The need ! r ethics in s ciety is su!!iciently i)# rtant that )any c )) nly held ethical 'alues are inc r# rated int la*s+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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CPAs Enc uraged t C nduct The)sel'es at a High $e'el

CPA examination GAAS and interpretations Continuing education requirements

Quality control

Peer review

Conduct o" CPA "irm personnel

Legal liability

PCAO and S!C

Code o# Pro#essional Conduct

AICPA practice sections

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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$earning %b&ecti'e /
(escribe the #ur# se and c ntent ! the A@CPA Code o# Pro#essional Conduct-

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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C de ! Pr !essi nal C nduct

Principles Ideal standards o" et#ical conduct stated in p#ilosop#ical terms$ %#ey are not en"orceable$ 'inimum standards o" et#ical conduct stated as speci"ic rules$ %#ey are en"orceable$

&ules o" conduct

Interpretation o" t#e rules o" conduct by Interpretations t#e AICPA (ivision o" Pro"essional !t#ics$ o" t#e rules %#ey are not en"orceable) but a o" conduct practitioner must *usti"y departure$
2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 2 - /8

C de ! Pr !essi nal C nduct

Publis#ed explanations and answers to questions about t#e rules o" conduct submitted to t#e AICPA by practitioners and ot#ers interested in et#ical requirements$ %#ey are not en"orceable) but a practitioner must *usti"y departure$

!t#ical rulings

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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Ethical Princi#les
.- /esponsi0ilities1 Pr !essi nals sh uld e.ercise sensiti'e and ) ral &udg)ents in all their acti'ities+ 2- The pu0lic interest1 8e)bers sh uld acce#t the bligati n t act in a *ay that *ill ser'e and h n r the #ublic+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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Ethical Princi#les
3- 4ntegrit)1 8e)bers sh uld #er! r) all res# nsibilities *ith integrity t )aintain #ublic c n!idence+ 5- %0!ecti6it) and independence1 8e)bers sh uld be b&ecti'e, inde#endent, and !ree ! c n!licts ! interest+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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Ethical Princi#les
7- Due care1 8e)bers sh uld bser'e the #r !essi nHs standards and stri'e t i)#r 'e c )#etence+ 8- Scope and nature o# ser6ices1 A )e)ber in #ublic #ractice sh uld bser'e the Code o# Pro#essional Conduct+

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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> Ethical Princi#les

.23578<=Tanggung 9awa0 Pro#esi Kepentingan :mum 4ntegritas %0!e ti6itas Kompetensi & Kehati;hatian Pro#esional Kerahasiaan Perila u Pro#essional Standar Te nis

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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2tandards ! C nduct
Ideal conduct by practitioners Principles

'inimum level o" conduct by practitioners

2ubstandard c nduct

&ules o" conduct

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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End ! Cha#ter 2

2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder

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