Arkansas State Board of Public Accountancy Rules & Ethics
Dr. Stephanie F. Watson, University of Central Arkansas
Licensing Status
Licensing Status Topics





Active License
Lapsed License
Void License
Inactive Status
Retired Status
 License Reinstatement
When does your CPA license to practice
expire?
A.
B.
C.
D.
E.
December 31st every year
April 1st every year
After 3 years of nonrenewal
When I give it back
When I’m no longer practicing
CPE Requirements (Programs)
CPE Topics
 Acceptable CPE Programs
 5 ways to earn CPE
o Group Programs
o Independent Study
o Self-study Program
o Authorship
o Preparing and Presenting CPE
 CPE Reciprocity
 Unacceptable Programs
Which of the following is not
considered a group program
A. A single location with a speaker and multiple audience
members
B. Closed circuit, one-way broadcast of a speaker to
multiple locations, each with multiple audience
members
C. A web-based broadcast of a speaker to multiple
individuals with an interface for Q&A
D. An upper-level college course
E. All of these are group programs.
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Arkansas State Board of Public Accountancy Rules & Ethics
Dr. Stephanie F. Watson, University of Central Arkansas
Which of the following is an example of
independent study?
A. Prepared CPE reading material with related questions
B. Research of an approved topic using library, Internet, or
other resources
C. A non-interactive, web-based course with video lecture
and related questions
D. A and C are independent study.
E. All of these are independent study.
Ann prepares a 2-hour CPE course and
presents it 3 times in the same
reporting year. How many CPE hours may Ann
claim for this course?
A.
B.
C.
D.
2 hours
4 hours
6 hours
8 hours
CPE Requirements (Hours and Types)
Quantity of CPE
 Total Hours
o 120 in 3 years
o 40 in 1 year
 Hours by Type
o By subject area
o Group requirements
o Ethics requirements
How many of your reporting hours
must be in the areas of accounting,
accounting ethics, attest, or taxation?
A. 20%
B. 40%
C. 40% if I offer accounting, attest,
or tax services to the public.
D. 50%
E. 60%
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Arkansas State Board of Public Accountancy Rules & Ethics
Dr. Stephanie F. Watson, University of Central Arkansas
How many of your reporting hours
must be in the areas of attest and
accounting theory/practice?
A. 20%
B. 40%
C. 20%
if I engage in attest or compilation functions
D. 40%
if I engage in attest or complication functions
How many of your reporting hours
must be in a group setting?
A.
B.
C.
D.
E.
0%
20%
40%
50%
60%
How many CPE hours must be in the
area of accounting professional conduct
and ethics?
A.
B.
C.
D.
4 hours if I am reporting 40 hours
4 hours if I am reporting 120 hours
12 hours if I am reporting 120 hours
4 hours in last 36 months regardless of the number of
hours I report
Beginning with reporting year 2015, 1
hour of your 4 ethics hours must cover
A. Laws and rules of the Arkansas State Board of Public
Accountancy.
B. Any ethics topic specifically related to Arkansas.
C. AICPA Code of Professional Conduct.
D. Any ethics topic specifically related to the conduct of
CPAs.
What is the most common problem
with CPE reporting in Arkansas?
A.
B.
C.
D.
E.
Failure to report enough hours
Failure to report enough ethics hours
Failure to report enough group hours
Failure to report enough attest/accounting hours
Reporting programs that don’t qualify for CPE
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Arkansas State Board of Public Accountancy Rules & Ethics
Dr. Stephanie F. Watson, University of Central Arkansas
You attended a CPE program on
5/15/2012. Until what date must you
maintain documentation of your attendance?
A.
B.
C.
D.
E.
5/15/2013 (one year from attendance)
12/31/2013 (one year from reporting)
12/31/2017 (four years from reporting)
5/15/2018 (five years from attendance)
12/31/2018 (five years from reporting)
Code of Professional Conduct
Which of the following does not impair
independence between a CPA/firm and
its attest client?
A. CPA and client have a contract (involving payment) that
is not related to attest engagement
B. A relative of the CPA owns an interest in the client
C. CPA or (employee of firm) owns an interest in the client
D. CPA owns an interest in a diversified mutual fund that
owns an interest in the client
21 Rules
 100s: Independence, Integrity, and Objectivity
o 101 Independence
o 102 Integrity and Objectivity
o 103 Incompatible Occupations
A CPA who performed professional
service on prospective financial
statements cannot
A. Be mentioned by name
in the prospective financial statements.
B. Profit on the success of the venture.
C. Appear to vouch for the achievability
of the prospective data.
D. Recommend the venture to others.
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Arkansas State Board of Public Accountancy Rules & Ethics
Dr. Stephanie F. Watson, University of Central Arkansas
21 Rules
 200s: Competence and Technical Standards
o 201: General Standards (for professional services)
o 202: Compliance with Standards
o 203: Accounting Principles
o 204: Prospective Financial Statements or Data
All of the following situations allow you
to reveal confidential client info to
those outside the company except:
A.
B.
C.
D.
Subpoena
Quality review of your performance
When it affects the financials of another client
Client consent
21 Rules
 300s: Responsibilities to clients
o 301: Confidential Client Information
o 302: Records (requests)
Which of the following is not a violation
of responsibilities under the ASBPA
Code of Professional Conduct?
A. Operating as Jones, Anderson, and Smith, CPAs when
Anderson and Smith died last year.
B. Failure to file your personal tax return.
C. Failure to file a client’s tax return.
D. Accepting a referred client without informing them that
you paid a referral fee.
E. Coercing a client into purchasing additional services.
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Arkansas State Board of Public Accountancy Rules & Ethics
Dr. Stephanie F. Watson, University of Central Arkansas
21 Rules
 400s: Other responsibilities and practices
o 401: Discreditable Acts
o 402: Acting Through Others
o 403: Advertising and Other Forms of Solicitation
o 404: Firm Names
o 405: Practice in Un-registered Entity
o 406: Association With a Non-licensed Office/Business
o 407: Referrals to/from Non-licensed Office/Business
o 408: Acceptance of Commissions or Referral Fees
o 409: Communications
o 410: Change of Address or Business Affiliation
o 411: Failure to File Tax Returns
o 412: Criminal Convictions/Disciplinary Actions
Noncompliance and Sanctions
Prohibited Acts, Conduct, Practices
 Fraud, dishonesty, or deceit in obtaining ASPBA licensing
 Dishonesty, fraud, gross negligence in practicing of public
accountancy
 Violation of any of the provisions of ASBPA laws
 Violation of a rule of professional conduct or ASBAP rules
 Conviction of a felony under the laws of US or any state
 Conviction of any crime an element of which is dishonesty,
fraud, or moral turpitude under the law under the laws of US
or any state
 Sanction or disciplinary action by the SEC, PCAOB, IRS, or
credentialing body (federal, state, foreign) regulating conduct
of licensees providing professional accounting services
 Other than for failure to pay annual fees
 Conduct discreditable to the public accounting profession
 Violation of any board order or agreement for the resolution
of asserted violations
If you are found to have committed a
prohibited act, the ASBPA can impose
all of the following except:
A.
B.
C.
D.
E.
Revocation of your CPA license
Make you take the CPA exam again
A $10,000 penalty
Incarceration
Coursework
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Arkansas State Board of Public Accountancy Rules & Ethics
Dr. Stephanie F. Watson, University of Central Arkansas
Sanctions
 Suspension, revocation, or denial of license or practice
privilege (includes renewals)
 Penalty up to $10,000 per violation
 Completion of appropriate programs or courses
 Preissuance review of audits, reviews, or compilations
 Quality review
 Completion of the licensing examination
 Conditions or restrictions upon the license, registration, or
practice privilege
 Cost of ASBPA proceedings and investigations
 Other requirements or penalties the ASBPA finds appropriate
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