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Required Ethics CPE for Virginia Registered CPAs

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					2012 Required Ethics CPE for
  Virginia Registered CPAs
            CFEs
             and
        CMAs/CFMs
 Based on Virginia Board of Accountancy
   Outline published in February 2011
                Your Instructor

             Dr. Doug Ziegenfuss
•   Chair and Professor
•   Department of Accounting
•   Constant Hall, Room 2157
•   Old Dominion University
•   Norfolk, Virginia 23529-0229
•   Office 757-683-3514
•   FAX 757-683-3258
•   E-Mail dziegenf@odu.edu
                 Ground Rules!
• This session must be 100 minutes long.
• You must attend the entire session.
• The session must contain the material in the Virginia
  Board of Accountancy Outline as shown on their website
  www.boa.state.va.us
• Important: CPE providers should urge participants to
  monitor the VBOA website for updates and information
  regarding the VBOA. CPE providers should also urge
  licensees to register with the Virginia Town Hall to receive
  automated VBOA regulatory updates
  (www.townhall.state.va.us/index.cfm).
• The session should be principally in the area of
  management accounting and financial management (IMA)
         Ground rules!
          (Continued)

• PLEASE TURN OFF YOUR CELL
  PHONES AND PAGERS!
• DO NOT LEAVE THE ROOM OR
  THIS SESSION WILL NOT COUNT!
            CPE Providers
• 1) Must provide a copy of this outline to
  each participant.
• 2) Should encourage participants to
  monitor the VBOA website for updates
  and information.
• 3) Remind participants to update contact
  information at the VBOA to ensure
  communication with the Board.
                Ground rules!
                 (Continued)
• If the participant is not satisfied with the
  content of this course, the instructor, or does
  not believe that the course satisfies the
  requirements of this outline, the participant is
  encouraged to contact the VBOA at
  boa@boa.virginia.gov, or by calling (804) 367-
  0728.
                 VBOA Contact Information


•   9960 Mayland Drive, Suite 402, Henrico, Virginia 23233
•   (804) 367-8505 (office)
•   (894) 527-4409 (fax)
•   boa@boa.virginia.gov (email)
•   www.boa.virginia.gov (website)
•   Office hours are 8:15 AM to 5:00 PM, Monday through Friday, with
    the exception of state holidays




                                   7                        January 2011
       VIRGINIA BOARD OF ACCOUNTANCY
        2012 ETHICS CPE COURSE OUTLINE



A. Providing Volunteer Services as a Virginia CPA
   • A minimum of 30 minutes must be devoted to this topic.
   • Use of accompanying VBOA handout is required.

B. Awareness of Behavioral Issues Relative to Virginia
CPAs
   • Useof accompanying VBOA handout is required
   (Enforcement Cases).
       VIRGINIA BOARD OF ACCOUNTANCY
        2012 ETHICS CPE COURSE OUTLINE
                    (Continued)

C. Process for ethical decision-making
(5 minutes) Handout should be provided – suggested
   resources.**
• **Links to ethical decision-making models:
• www.ethics.org
• www.rotaryfirst100.org/history/headings/4-
   way_ethics.htm
• www.ethicsworld.org
• www.scu.edu/ethics/practicing/decision
      VIRGINIA BOARD OF ACCOUNTANCY
       2011 ETHICS CPE COURSE OUTLINE
                   (Continued)

D. Awareness of Regulatory Issues Relative to
Virginia CPAs
• Provider may use discretion as to topic selection
  from the following list.
• Practical situations, potential solutions and
  examples must be included and illustrated
  with short scenarios or simulations.
   VIRGINIA BOARD OF ACCOUNTANCY
    2011 ETHICS CPE COURSE OUTLINE
                (Continued)

 Virginia’s Top 10 Issues for 2012
1. IRS PTIN Requirements • Circular 230
Updates
2. CPE • Professional Relevance (i.e., Public vs.
Industry/Government)
• New Regulations – 8 hours Annually Attest &
Compilation CPE (18VAC5-22-140) Beginning in
Calendar Year 2011
3. AICPA Code of Professional Conduct –
Section 101 Independence • Section 101-3
Performance of Nonattest services (Revised)
     VIRGINIA BOARD OF ACCOUNTANCY
      2011 ETHICS CPE COURSE OUTLINE
                  (Continued)

• 4. AICPA Code of Professional Conduct –
  Section 501 Acts Discreditable
• • Section .02 501-1 Response to requests by
  clients and former clients for records
• 5. SEC Whistleblower Rules • Effective
  August 2011
• • AICPA Ethics Hotline – 1-888-777-7077
     VIRGINIA BOARD OF ACCOUNTANCY
      2011 ETHICS CPE COURSE OUTLINE
                  (Continued)

• 6. Board Statute - § 54.1-4412.1 Licensing
  requirements for firms • Only a firm can
  provide attest services or compilation
  services to persons or entities located in
  Virginia
• • Must have a firm license
• • Subject to peer review
• 7. Mobility – CPAmobility.org
     VIRGINIA BOARD OF ACCOUNTANCY
      2011 ETHICS CPE COURSE OUTLINE
                  (Continued)

• 8. Overview of VBOA website • Browse for
  familiarity
• • Update contact information
• • On-line chat feature
• • Investigative (Enforcement) results
      VIRGINIA BOARD OF ACCOUNTANCY
       2011 ETHICS CPE COURSE OUTLINE
                   (Continued)

9. Communication with Clients & the VBOA •
Timeliness
• Engagement Letters
• AICPA Code of Professional Conduct – Section
301 Confidential Client Information
• Importance of maintaining client confidentiality via
electronic communications
• Board Regulation 18VAC5-22-170
Communication between the Board and licensees
  VIRGINIA BOARD OF ACCOUNTANCY
   2011 ETHICS CPE COURSE OUTLINE
               (Continued)



10. “On the Horizon” • Convergence -
IFRS
• Leases
• 10 topics every CPA must examine
to stay ahead of the curve
 A. Providing Volunteer Services as a
            Virginia CPA
                    •


A. A minimum of 30 minutes must be devoted
   to this topic.
B. Use of accompanying VBOA handout is
   required.
 A. Providing Volunteer Services as a
            Virginia CPA
                   (Continued)


Overall Concepts:
1. Attestation or Compilation Services may
   be done only by firms registered with the
   Virginia Board of Accountancy and
   subject to peer review.
2. All other services may be performed by
   CPAs without having to register with the
   VBOA.
 A. Providing Volunteer Services as a
            Virginia CPA
                   (Continued)


Overall Concepts (continued):
3. Virginia law allows an exception if they are
performing the services in their role as an
officer, employee, or member of the
governing body of the entity or entities about
whom the financial information is presented.
  A. Providing Volunteer Services as a
             Virginia CPA
                              (Continued)




• Attest Services. § 54.1-4400 defines attest services as “audit, review,
  or other attest services for which standards have been established
  emphasis added] by the Public Company Accounting Oversight Board,
  by the Auditing Standards Board or the Accounting and Review
  services Committee of the American Institute of Certified Public
   Accountants, or by any successor standard-setting authorities.”
 A. Providing Volunteer Services as a
            Virginia CPA
                      (Continued)


• Compilation Services. § 54.1-4400 defines
  compilation services as “compiling financial
  statements in accordance with standards
  established by the American Institute of Certified
  Public Accountants or by any successor standard-
  setting authorities.”
  A. Providing Volunteer Services as a
             Virginia CPA
                             (Continued)
Practice of Public Accounting. Two definitions are relevant—practice of
public accounting and assurance:
   a. § 54.1-4400 defines practice of public accounting as:
   the giving of an assurance other than [emphasis added] (i) by the
   person or persons about whom the financial information is presented
   or (ii) by one or more owners, officers, employees, or members of the
   governing body of the entity or entities about whom the financial
   information is presented.
   b. § 54.1-4400 defines assurance as:
   any form of expressed or implied opinion or conclusion about the
   conformity of a financial statement [emphasis added] with any
   recognition, measurement, presentation, or disclosure principles for
   financial statements.
 A. Providing Volunteer Services as a
            Virginia CPA
                      (Continued)


AU4 380.03, the governing body consists of the
persons “with responsibility for overseeing the
strategic direction of the entity and obligations
related to the accountability of the entity. This
includes overseeing the financial reporting process.”
For small and midsize not-for-profit entities, the
governing body is typically the board of directors or
trustees. However, depending on the facts and
circumstances, it may also include the audit
committee or finance committee.
 A. Providing Volunteer Services as a
            Virginia CPA
                      (Continued)


Performing accounting services does not constitute
submission of financial statements, is not a
compilation service, and is therefore not subject to
peer review. Examples of accounting services are
payroll, bank reconciliation, and other bookkeeping
services; preparing a working trial balance;
proposing adjusting journal entries; and consulting
on accounting matters.
 A. Providing Volunteer Services as a
            Virginia CPA
                   (Continued)


Case Example:
A statement by a licensee who is the treasurer
of a not-for-profit entity that the entity’s
financial statements present its financial
results determined using accounting principles
generally accepted in the United States of
America.
 A. Providing Volunteer Services as a
            Virginia CPA
                   (Continued)


Case Example:
A not-for-profit entity appoints a committee
or task force consisting entirely of persons
who do not hold a license to perform services
similar to attest services.
 A. Providing Volunteer Services as a
            Virginia CPA
                  (Continued)


• Case Example:
• The governing body of a church specifies
  procedures to be performed on the financial
  statements of the church and communicated
  to the governing body and ultimately the
  congregation.
 A. Providing Volunteer Services as a
            Virginia CPA
                  (Continued)


• Case Example:
• The regional body that oversees a church
  specifies procedures to be performed on the
  financial statements and communicated to
  the regional body. A CPA communicates
  the results of the procedures.
 A. Providing Volunteer Services as a
            Virginia CPA
                    (Continued)


• Case Example:
• Not-for-profit entities often ask a licensee to
  read financial statements prepared by staff.
  The licensee may be asked to perform this
  service as an individual, but more
  commonly the not-for-profit entity asks the
  licensee to perform this service as a member
  of a finance or similar committee.
    Handouts of actual VBOA
       Enforcement Cases

• Please see VBOA Handout!
• Cumulative up to 2011
Any Discussion
or Comments?
   Process for Ethical Decision
             Making
• **Links to ethical decision-making models:
• www.ethics.org
• www.rotaryfirst100.org/history/headings/4-
  way_ethics.htm
• www.ethicsworld.org
• www.scu.edu/ethics/practicing/decision
        Making Ethical Decisions
• The Importance of corporate culture (importance of “Tone At the
  Top”)
• “Final Accounting” by Barbara Ley Toffler
• ISBN 0-7679-1383-3
• Most important issue is whether your employees:
    – Are sensitive to ethical issues.
    – Desire to act ethically.
    – Have the right guidance concerning ethical issues.
    – Are comfortable with the organization’s procedures for handling ethical
      issues – mentoring and whistleblowing procedures.
    – Do not fear retribution for reporting and resolving ethical issues.
    What are ethical dilemmas?


• An ethical dilemma occurs whenever two or
  more stakeholders have conflicting stakes
  on your loyalty or outcome from a decision.
• Who are your stakeholders?
   What is the best way to handle
        ethical dilemmas?

• Prevention!
• Prevention!
• Prevention!
  How to resolve ethical
dilemmas once they occur?
               SOURCES

• ARTHUR ANDERSEN “Ethics in Business
  Program”
• Jones, Massey, and Thorne, “Auditors’ Ethical
  Reasoning: Insights from Past Research and
  Implications for the Future,” Journal of
  Accounting Literature, Vol. 22, 2003, pp. 45-103.
• Cotton, “Doing the Right Thing: Part 1 – Tackling
  Ethical Decision Models,” Disclosures,
  July/August 2006.
• AICPA – Ethical Decision Tree for Government
  Accountants.
Procedures to follow in resolving ethical
                decisions

   Step 1 – Determine the facts - What, Who, Where, When, How.
   (Do you even have an ethical issue here)
   Step 2 – Identify the ethical issues and stakeholders involved.
   Step 3 – Study the guidance given by your organization and the
   accounting profession – organization code of ethics, AICPA Code
   of Professional Conduct, VA BOA regulations, and other sources
   such as the Yellow Book. Notify your organization of the
   dilemma and work with it to properly resolve.
   Step 4 – Identify your ethical values?
   Ethical Relativism, Utilitarianism, Deontological Approaches
   such as Judeo-Christian, Kantian or Rights/Justice.
Procedures to follow in resolving
       ethical decisions
                       (Continued)
Step 5 – Identify various courses of action.
Step 6 – Evaluate the consequences of each possible
course of action on you and your stakeholders.
Step 7 – If appropriate, discuss the choices with a trusted
person to help gain greater perspective regarding the
choices.
Step 8 – Decide the best course of action consistent with
the steps 3 and 4.
Step 9 – Make a decision.
Step 10 – Work within your organization as much as
possible.
Step 11 – Document the above.
     Institute of Management Accountants (IMA)
      Statement of Ethical Professional Practice


•    Principles – Honesty, Fairness,
     Objectivity, and Responsibility.
•    Standards
    1.   Competence
    2.   Confidentiality
    3.   Integrity
    4.   Credibility
•    Resolution of Ethical Conflict
                     IMA Code
•    Standard I:
•    Each member has a responsibility to:
1.   Maintain an appropriate level of professional expertise
     by continually developing knowledge and skills.
2.   Perform professional duties in accordance with relevant
     laws, regulations, and technical standards.
3.   Provide decision support information and
     recommendations that are accurate, clear, concise, and
     timely.
4.   Recognize and communicate professional limitations or
     other constraints that would preclude responsible
     judgment or successful performance of an activity.
AICPA Code of Professional Conduct


• AICPA Code of Conduct
• Posted on following website:
• http://www.aicpa.org/about/code/index.html
      VIRGINIA BOARD OF ACCOUNTANCY
       2011 ETHICS CPE COURSE OUTLINE
                   (Continued)

D. Awareness of Regulatory Issues Relative to
Virginia CPAs
• Provider may use discretion as to topic selection
  from the following list.
• Practical situations, potential solutions and
  examples must be included and illustrated
  with short scenarios or simulations.
      VIRGINIA BOARD OF ACCOUNTANCY
       2011 ETHICS CPE COURSE OUTLINE
                   (Continued)



•
• 1. IRS PTIN Requirements • Circular 230 Updates
                       Circular 230

• This part contains rules governing the recognition of attorneys,
  certified public accountants, enrolled agents, and other persons
  representing taxpayers before the Internal Revenue Service.
• Subpart A of this part sets forth rules relating to the authority to
  practice before the Internal Revenue Service;
• Subpart B of this part prescribes the duties and restrictions relating to
  such practice;
• Subpart C of this part prescribes the sanctions for violating the
  regulations;
• Subpart D of this part contains the rules applicable to disciplinary
  proceedings; and
• Subpart E of this part contains general provisions including provisions
  relating to the availability of official records.
  REGISTRATION REQUIREMENTS
      FOR TAX PREPARERS
• See:
  http://www.irs.gov/taxpros/article/0,,id=221009,00.html
• Beginning January 1, 2011, all paid preparers must have a
  Preparer Tax Identification Number before preparing
  returns. If you already have a PTIN, you must renew it.
  You can sign up for or renew your PTIN online or by
  paper application. It costs $64.25 per year.
  REGISTRATION REQUIREMENTS FOR
          TAX PREPARERS
             (Continued)
• In mid-2011, the second phase of the paid preparer oversight program
  is scheduled to begin. You must pass an exam to demonstrate your
  competency to prepare federal tax returns. Once you pass the exam,
  you will become an IRS Registered Tax Return Preparer.
• Exceptions—the following individuals will be exempt from testing:
    – Attorneys, certified public accountants, and enrolled agents who are active and in
      good standing with their licensing agency
    – Supervised preparers (those who do not sign returns but are employed by attorney
      or CPA firms or other recognized firms at least 80 percent owned by attorneys,
      CPAs, or enrolled agents, and who are directly supervised by an attorney, CPA, or
      enrolled agent)
    – Those who prepare no Form 1040 series returns
 REGISTRATION REQUIREMENTS FOR
         TAX PREPARERS
            (Continued)
• In addition to a competency exam, IRS Registered Tax
  Return Preparers must take continuing education annually.
• The start date for continuing education courses has not
  been determined.
• You will be given further instructions through your PTIN
  account once more guidance is available.
• Exceptions—the same individuals who are exempt from
  testing are exempt from continuing education.
   VIRGINIA BOARD OF ACCOUNTANCY
    2011 ETHICS CPE COURSE OUTLINE
                (Continued)

2. CPE • Professional Relevance (i.e., Public vs.
Industry/Government)
• New Regulations – 8 hours Annually Attest &
Compilation CPE (18VAC5-22-140) Beginning in
Calendar Year 2011
Continuing Professional Education (CPE) 18VAC5-
                      22-90
• There is no change to:
    o Total number of hours of CPE required;
    o Amount of CPE that may be obtained from preparing and making
      presentations - maximum of 30 hours for each 3 calendar-year period;
    o Amount of CPE that may be obtained through writing material that is
      relevant, formally reviewed, and published (no limit); and
    o An hour of CPE is generally accepted nationally to consist of 50
      minutes.

• New 18VAC5-22-140 requires persons who release or authorize the
  release of reports on attest services or compilation services to obtain
  at least 8 hours each year of CPE related to attest services or
  compilation services (beginning in calendar year 2011). This does
  not increase the total number of hours of CPE required.


                                      50                           January 2011
                           CPE, continued
• Whether a person who holds a Virginia license is subject to the CPE
  requirement depends on whether he provides services, rather than
  whether he tells the person or entity for whom he provides services that
  he is a CPA.

• A licensee who did not provide services to the public using the CPA
  title or to an employer using the CPA title during the current calendar
  year, for example, because of retirement or a career “break”:

    o Is not required to have obtained CPE during the 3 calendar-year period
      ending with the current calendar year;
    o Can still use the CPA title; and
    o Is subject to a catch-up provision before beginning to provide services.


                                        51                            January 2011
                         CPE, continued

• Depending on the facts and circumstances, taking the annual ethics
  course acceptable to the board of accountancy of another state in which
  the individual holds a license may be sufficient.

• When in doubt regarding CPE, consult with the VBOA staff.




                                    52                        January 2011
            VA BOA CPE Requirements
                     18 VAC 5-22-90
• CPE required prior to commencing services.
• Reporting year is the calendar year
• 31-day grace period
• Report on the three-year reporting (calendar) year preceding
the year of renewal.
•For 2011, this means 2010, 2009, and 2008.
• All registrants must have the two hour ethics course for each
year and,
• 120 CPE credits with a minimum of 20 CPE credits in any one
year.
•CPA may choose the areas of study and courses as long as the
learning activities maintain or improve his professional
competence.
        VA BOA CPE Requirements
                18 VAC 5-22-90
                  (Continued)

• Self-Study CPE courses – fine as long as
CPE provider provides a means of meeting
objectives.
•There are other ways of obtaining CPE.
•Please see regulations for specific details.
           Review Question!
• Could you still be in violation of the Code
  of Professional Conduct and BOA
  regulation concerning professional
  competence yet be in compliance with the
  BOA CPE requirements?
      VIRGINIA BOARD OF ACCOUNTANCY
       2011 ETHICS CPE COURSE OUTLINE
                   (Continued)




• 3. AICPA Code of Professional Conduct –
  Section 101 Independence • Section 101-3
  Performance of Nonattest services
  (Revised)
• Please see handout.
     VIRGINIA BOARD OF ACCOUNTANCY
      2011 ETHICS CPE COURSE OUTLINE
                  (Continued)



4. AICPA Code of Professional Conduct –
Section 501 Acts Discreditable
   • Section .02 501-1 Response to requests by
   clients and former clients for records
   Please see handout for “Top Ten List of
   Do’s and Don’t for Virginia Licensees.”
     VIRGINIA BOARD OF ACCOUNTANCY
      2011 ETHICS CPE COURSE OUTLINE
                  (Continued)




• 5. SEC Whistleblower Rules • Effective
  August 2011
• • AICPA Ethics Hotline – 1-888-777-7077
• http://www.ethics.org/news/final-sec-
  whistleblower-provisions-go-effect-august-
  12-2011
      VIRGINIA BOARD OF ACCOUNTANCY
       2011 ETHICS CPE COURSE OUTLINE
                   (Continued)



6. Board Statute - § 54.1-4412.1 Licensing
requirements for firms • Only a firm can
provide attest services or compilation services
to persons or entities located in Virginia
• Must have a firm license
• Subject to peer review
     VIRGINIA BOARD OF ACCOUNTANCY
      2011 ETHICS CPE COURSE OUTLINE
                  (Continued)



 7. Mobility – CPAmobility.org
http://www.cpamobility.org/
Case Example: You are currently
licensed as a CPA in another state and
am assigned here temporarily,
permanently. What are your
responsibilities?
    VIRGINIA BOARD OF ACCOUNTANCY
     2011 ETHICS CPE COURSE OUTLINE
                 (Continued)

8. Overview of VBOA website • Browse for familiarity
http://www.boa.virginia.gov/
• Update contact information
http://www.boa.virginia.gov/contact_us.shtml#UpdateCon
tactInfo
• On-line chat feature
http://livehelp.vi.virginia.gov/message_box.php?theme=&
l=admin&x=1&deptid=24
• Investigative (Enforcement) results
http://www.boa.virginia.gov/Docs/StatisticsClosedCasesC
hart2007-2011.pdf
      VIRGINIA BOARD OF ACCOUNTANCY
       2011 ETHICS CPE COURSE OUTLINE
                   (Continued)

9. Communication with Clients & the VBOA •
Timeliness
• Engagement Letters
• AICPA Code of Professional Conduct – Section
301 Confidential Client Information
• Importance of maintaining client confidentiality via
electronic communications
• Board Regulation 18VAC5-22-170
Communication between the Board and licensees
     VIRGINIA BOARD OF ACCOUNTANCY
      2011 ETHICS CPE COURSE OUTLINE
                  (Continued)



10. “On the Horizon” • Convergence - IFRS
  • Leases
  • 10 topics every CPA must examine to stay
  ahead of the curve
          GENERAL
QUESTION AND ANSWER SESSION

• Individual Questions
       • Access BOA Webpages at www.boa.state.va.us
       • Telephone the Board Office at 804-367-8505
       • Email the Board Office at boa@boa.state.va.us*
       • Write to the Board Office at:

                Board of Accountancy
            9960 Mayland Drive Suite 402
              Richmond, Virginia 23233
       * Usually best for regulants and Board
        IMA Ethics Hotline


• 1-800-245-1383
 THANK YOU AND
HAVE A GREAT DAY

				
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