Acc 645: Advanced Auditing 5-1: Journal Entry Southern New Hampshire University 01:40:32 GMT -05:00 Here at ABC Accounting Services, we find it is vital to cultivate an environment and atmosphere that maintains the highest ethical standards possible; to validate the integrity of the services w...
, Here at ABC Accounting Services, we find it is vital to cultivate an environment and
atmosphere that maintains the highest ethical standards possible; to validate the integrity of the
services we provide our clients. Recently, this company was informed and made aware that a
senior accountant here at ABC Accounting Services named John has been providing a client
with services out of the confines of this company and is maintaining a personal financial stake in
this client’s company. This action raises a concern of conflict of interest and could lead to
violations of the rules and sanctions set forth by AICPA. This journal will outline the key
components of
the rules the AICPA has regarding conflict of interests, and the violations associated with
this chain of events, and the reasoning of why ethical standards are so vital.
The AICPA Code of Conduct rule 1.100.001 which is also known as the “Integrity and
Objectivity Rule” state that all professional members must do everything possible to maintain
their objectivity and integrity, circumvent any conflicts of interest, and will consciously not
misrepresent facts. The rule calls for accountants in the scope of their duties to remain impartial
and show no bias.
The AICPA Code of Conduct rule 1.110.010 on Conflicts of Interests states if conflict
of interest creates adverse interest and self-interest threats to the member's compliance with the
'Integrity and Objectivity Rule' (AICPA, 2014). This deals with matters that may impair a
member’s judgement and objectivity. A member must take reasonable precautions and steps
to identify and avoid conflict of interests and must disclose to employer and client before
proceeding with any services.
The AICPA Code of Conduct rule 1.200.001 on Independence emphasizes how vital it
is for an accountant to be free from any conflicts that could have their judgement and
objectivity
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