MODULE 1, Part A
Theory construction Body of Policy of expected
knowledge Code of ethics behaviour
Systematic research
Education APES 110
Theory + Practice + CPD
process Ethos and
Attributes of a Values, norms, symbols
culture
Well-being of society profession
Ideal of Service Module 1,
Pursuit of excellence Professional Ability to diagnose +
solve <--- Becker 1982
Community service Judgement
Autonomy &
Ability to regulate itself Independence Governing Responsible for achieving attributes
Maintain attributes
•Obtaining admission as a Member by improper means
•Breaching the Constitution, By-Laws or Code of
Types of Professional Conduct Leadership responsibilites for quality
complaint - •Dishonorable practice or conduct that is derogatory to within the firm
Constitution of CPA CPA members Accounting Professional and Ethical
Australia (Clause •Failing to observe a proper standard of professional Standards Board (APESB) Acceptance & continuance of client
39) care, skill or competence relationships & specific engagement
•Becoming insolvent •Standard setting - AASB and AUASB ->
•Being found to have acted dishnestly in any civil FRC
proceedings •Conformity with standards -APES 210 Ethical requirements - policy and
Conformity w Auditing and Assurance
stds
•Demonstraing a range of attributes that are •Practice reviews Monitoring
Traditional View focused on service society
•Accounting firm regulations - APES 320
•Public interest Human resources
Quality Control for firms
•8 Attributes
•Ideal view of the accounting profession Engagement performance
•Self interested
Market
•Less control with the broader public interest
Control/Critical View
•Create a monopoly
•Generates greater financial returns; building
status; prestige in the economy
Professional Discipline; Penalties and Appeals
If CEO concludes yes If complaint is
If yes a case, refer PCO's report Case handled by
Investigated by -> refer to either upheld, member &
to a Professional considered by MPC - Investigating Case
Complaint received Manager - Disciplinary complainant will be
Conduct Officer > recommend to Manager (ICM) and
in writing Professional Committee or One informed of the
(PCO) for further CEO of CPA AU if heard by Disc.
Conduct (MPC) Person Tribunal decision, there is
investigation there's a case. Committee or OPT
(OPT) right to appeal.
, MODULE 1, Part B
IFAC Research - PAIB P.43; Depreciation
Creative Selecting accounting policies that do not
Public sector Accounting achieve faithful representation
Big 4 Poor Audit Auditors unable to identify entities in financial
Public Quality distress in the past
Practce
Reduce
Second-tier firm Auditors depend on clients to pay fees and so
Credibility Lack of auditor
independence are dependent
Type of SMP
Accountants
Large Business Role that accounting played in the GFC
Quantitative
SMEs Accounting
Accountan distortions Failure to understand financial instruments
ts in Qualitative
business Public sector
Manipulation to achieve targets
Not for profits Government now co-regulates the
FRC accounting profession
Impacts of higher levels of depreciation Accounting stds are externally created
1. In the short term, it will mean lower profits and lower asset levels. Backing by law
2. In the longer term, there will be a rise in profits with lower assets levels.
Non-compliance may have legal penalties
This may lead to a lower measurement base for a manager against which
future performance is measured— this will show a greater percentage
improvement and is likely to lead to higher long-term bonuses. Lower asset Code of conduct APES 110 ensures consistent behaviour
levels will also lead to a higher return on assets.
3. Lenders may be nervous due to lower profit levels and asset values that
may be used as security. Restore Credibiity
4. Owners with a short-term approach may be frustrated by lower profits FRC monitors auditor Reduces the profession's autonomy but
and consider selling their investment. This may lead to a decline in the share independence gives comfort to the community
price.
SOX 2002
Impacts of lower levels of depreciation
1. It will lead to higher profits and higher asset levels, which may be the Enhanced
regulations COSO 2004
source of short-term rewards for managers.
2. Lenders and owners may have greater confidence levels in the
CLERP 9
organisation because of higher profits and asset values.
3. It may reduce investments in assets in the future, as assets are assumed to International
Many countries adopted same accounting
have a longer lifespan than is actually the case. This may hinder the consistency/
organisation’s competitiveness. and auditing standards
Harmonisation
4. When assets reach the end of their useful life and are scrapped or sold,
there may be large write-offs if the written-down value of the asset is higher
Theory construction Body of Policy of expected
knowledge Code of ethics behaviour
Systematic research
Education APES 110
Theory + Practice + CPD
process Ethos and
Attributes of a Values, norms, symbols
culture
Well-being of society profession
Ideal of Service Module 1,
Pursuit of excellence Professional Ability to diagnose +
solve <--- Becker 1982
Community service Judgement
Autonomy &
Ability to regulate itself Independence Governing Responsible for achieving attributes
Maintain attributes
•Obtaining admission as a Member by improper means
•Breaching the Constitution, By-Laws or Code of
Types of Professional Conduct Leadership responsibilites for quality
complaint - •Dishonorable practice or conduct that is derogatory to within the firm
Constitution of CPA CPA members Accounting Professional and Ethical
Australia (Clause •Failing to observe a proper standard of professional Standards Board (APESB) Acceptance & continuance of client
39) care, skill or competence relationships & specific engagement
•Becoming insolvent •Standard setting - AASB and AUASB ->
•Being found to have acted dishnestly in any civil FRC
proceedings •Conformity with standards -APES 210 Ethical requirements - policy and
Conformity w Auditing and Assurance
stds
•Demonstraing a range of attributes that are •Practice reviews Monitoring
Traditional View focused on service society
•Accounting firm regulations - APES 320
•Public interest Human resources
Quality Control for firms
•8 Attributes
•Ideal view of the accounting profession Engagement performance
•Self interested
Market
•Less control with the broader public interest
Control/Critical View
•Create a monopoly
•Generates greater financial returns; building
status; prestige in the economy
Professional Discipline; Penalties and Appeals
If CEO concludes yes If complaint is
If yes a case, refer PCO's report Case handled by
Investigated by -> refer to either upheld, member &
to a Professional considered by MPC - Investigating Case
Complaint received Manager - Disciplinary complainant will be
Conduct Officer > recommend to Manager (ICM) and
in writing Professional Committee or One informed of the
(PCO) for further CEO of CPA AU if heard by Disc.
Conduct (MPC) Person Tribunal decision, there is
investigation there's a case. Committee or OPT
(OPT) right to appeal.
, MODULE 1, Part B
IFAC Research - PAIB P.43; Depreciation
Creative Selecting accounting policies that do not
Public sector Accounting achieve faithful representation
Big 4 Poor Audit Auditors unable to identify entities in financial
Public Quality distress in the past
Practce
Reduce
Second-tier firm Auditors depend on clients to pay fees and so
Credibility Lack of auditor
independence are dependent
Type of SMP
Accountants
Large Business Role that accounting played in the GFC
Quantitative
SMEs Accounting
Accountan distortions Failure to understand financial instruments
ts in Qualitative
business Public sector
Manipulation to achieve targets
Not for profits Government now co-regulates the
FRC accounting profession
Impacts of higher levels of depreciation Accounting stds are externally created
1. In the short term, it will mean lower profits and lower asset levels. Backing by law
2. In the longer term, there will be a rise in profits with lower assets levels.
Non-compliance may have legal penalties
This may lead to a lower measurement base for a manager against which
future performance is measured— this will show a greater percentage
improvement and is likely to lead to higher long-term bonuses. Lower asset Code of conduct APES 110 ensures consistent behaviour
levels will also lead to a higher return on assets.
3. Lenders may be nervous due to lower profit levels and asset values that
may be used as security. Restore Credibiity
4. Owners with a short-term approach may be frustrated by lower profits FRC monitors auditor Reduces the profession's autonomy but
and consider selling their investment. This may lead to a decline in the share independence gives comfort to the community
price.
SOX 2002
Impacts of lower levels of depreciation
1. It will lead to higher profits and higher asset levels, which may be the Enhanced
regulations COSO 2004
source of short-term rewards for managers.
2. Lenders and owners may have greater confidence levels in the
CLERP 9
organisation because of higher profits and asset values.
3. It may reduce investments in assets in the future, as assets are assumed to International
Many countries adopted same accounting
have a longer lifespan than is actually the case. This may hinder the consistency/
organisation’s competitiveness. and auditing standards
Harmonisation
4. When assets reach the end of their useful life and are scrapped or sold,
there may be large write-offs if the written-down value of the asset is higher
