Understanding the Conceptual Framework in Professional Judgment
Explore the conceptual framework in professional judgment, including identifying threats, evaluating safeguards, and applying revised thinking. A case study presents a scenario to assess ethical considerations. Polling questions test comprehension of how to address significant threats in attest engagements and implement safeguards effectively.
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Conceptual Framework What Is It And How To Use It As of January 24, 2014 #
What is a Conceptual Framework Nothing on Point in the Code Old Thinking Relationship or circumstance must be permitted Revised Thinking Apply the conceptual framework Requires professional judgment Reasonable Third Party - For example, if the situation involves a staff person often an effective safeguard is: - The staff's removal from the engagement - Additional review of the staff s work #AICPA_Banks
Steps of the Conceptual Framework Step 3 Identify Safeguards Step 1 Identify Threats Step 2 Evaluate Threats No Threats not Significant Proceed Threats Proceed Existing New Threats Step 4 Evaluate Safeguards Not Acceptable Level Stop Threats at Acceptable Proceed
Conceptual Framework - Case Study Characters Anthony Auto Owner of Used Car Dealership Evan Owner of a CPA Firm (and Anthony s brother) Robert Owner of Auto Supply Store and ber mechanic (childhood friend of Auto and Evan) Situation Can Evan perform reviews for Robert s store? #AICPA_Banks
Polling Question: Conceptual Framework When using the conceptual framework, if a threat is significant you should: A. Not perform the attest engagement B. Discuss the threat with those charged with governance C. Apply safeguards that eliminate or reduce the threat to an acceptable level D. Adopt policies and procedures that are designed to monitor the quality control of the attest engagement #AICPA_Banks
Polling Question: Safeguards If Evan implemented the same safeguards, could he perform an annual review for Auto s used-car dealership? A. Yes B. No #AICPA_Banks
Summary & Questions #AICPA_Banks
