| Which code governs services performed for private/public Non-Attest clients? | The professional code governs for private Attest clients
SOX rules govern for public Attest clients |
| How does SOX limit MIPP's advisory services to public attest clients? (three ways) | 1. Should not audit their own work
2. Should not advocate for an attest client
3. Should not perform management duties |
| SOX list eight (8) services that a MIPP CAN NEVER provide as a service to an attest client, what are the eight (8) services? | 1. Bookkeeping
2. Financial system implementation or design
3. Appraisal or Valuation services
4. Actuarial services
5. Internal Audit services
6. Management or Human Resource services
7. Broker/Dealer or Investment services
8. Legal or Expert services unrelated to an audit
*cannot provide any other service that the PCAOB determines as impermissible*
You can provide tax services to an audit client, however, independence is impaired under some circumstances |
| How is independence Impaired when MIPPS
's provide tax services to an Audit client? | 1. Contingent fee arrangement
2. Marketing/planning services in favor of a certain tax treatment for a confidential transaction
3. Provides tax services to Management or their immediate families |
| SOX Process - what is the process? | An Audit committee of the client must pre-approve the non-attest services purchased, noy the CEO,CFO of the audit client |
| Under SOX rules, who are considered close family members? | A spouse, spouse equal, dependent, non dependent child, or parent |
| Under SOX, who are considered to be immediate family members? | Spouse, spouse equal, or dependent |
| Financial relationships under SOX, prohibits the firm, shareholders, immediate family and covered family members from having an attest client if direct are? | 1. Owning stock, bonds, options, notes, etc.
2. A nondiversified mutual fund where more than 20% or more of money is invested
* Indirect investments cannot be material or exceed 5%*
* cannot have ownership at any level in a related entity that have ownership or can influence an attest client* |
| Partner rotation-SOX requires how many years can a Lead Partner engage on an audit for a client? | 5 years (5 years off) |
| Partner rotation-SOX requires how many years can a Other Partner provide more than 10 hours of service to an attest client? | 7 years (7 years on, 2 years off) |
| What are the responsibilities of the PCAOB, in relation to Accounting firms? | 1. Register accounting firms that audit public companies
2. Establish audit, quality controls, ethics, independence, and other standards
3. Inspect firms
4. Conduct annual inspections of firms that audit more than 100 clients a year
5. Conduct inspections every 3 years on firms that audit fewer than 100 clients
6. Investigate and punishes wrongdoings |
