Search
Please make sure you are using a supported browser. To find out more click here.

Glossary (Part 2)

Hint: Use Ctrl + F and search for the term you are looking for

In Part 2 of the CIMA Code of Ethics for Professional Accountants, the following expressions have the following meanings assigned to them:

Acceptable level A level at which a professional accountant using the reasonable and informed third party test would likely conclude that the accountant complies with the fundamental principles. 
Client Any person or entity, other than the member’s employer, that engages a member or member’s firm to perform professional services and, if different, the person or entity with respect to which professional services are performed. For purposes of this definition for AICPA members, the term employer does not include the following:
(a)   Person or entity engaged in public practice.
(b)   Federal, state, and local government or component unit thereof, provided that the member performing professional services with respect to the entity is 
(i)    directly elected by voters of the government or component unit thereof with respect to which professional services are performed;
(ii)   an individual who is (1) appointed by a legislative body and (2) subject to removal by a legislative body; or
(iii)  appointed by someone other than the legislative body, so long as the appointment is confirmed by the legislative body and removal is subject to oversight or approval by the legislative body. 
Close relative A parent, sibling, or nondependent child. 
Council The AICPA Council. 
Employing organisation Any entity that employs the member or engages the member on a contractual or volunteer basis in an executive, a staff, a governance, an advisory, or an administrative capacity to provide professional services
Financial interest An ownership interest in an equity or a debt security issued by an entity, including rights and obligations to acquire such an interest and derivatives directly related to such interest. 
Financial statements A presentation of financial data, including accompanying disclosures, if any, intended to communicate an entity‘s economic resources or obligations, or both, at a point in time or the changes therein for a period of time, in accordance with the applicable financial reporting framework. Tax returns and supporting schedules do not, for this purpose, constitute financial statements. The statement, affidavit, or signature of preparers required on tax returns neither constitutes an opinion on financial statements nor requires a disclaimer of such opinion. 
Fundamental principles The fundamental principles are integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour.
Immediate family A spouse, spousal equivalent, or dependent (regardless of whether the dependent is related). 
Inducement An object, situation, or action that is used as a means to influence another individual’s behaviour, but not necessarily with the intent to improperly influence that individual’s behaviour.
Inducements can range from minor acts of hospitality between business colleagues (for professional accountants in business and Members in Business), or between professional accountants in public practice, to acts that result in non-compliance with laws and regulations. An inducement can take many different forms, for example:
·         Gifts.
·         Hospitality.
·         Entertainment.
·         Political or charitable donations.
·         Appeals to friendship and loyalty.
·         Employment or other commercial opportunities.
Preferential treatment, rights or privileges.
Institute The AICPA or CIMA.
Interpretation Pronouncements issued by the AICPA and CIMA to provide guidelines concerning the scope and application of the rules of conduct and fundamental principles. 
Member A member of the AICPA is a member, an associate or affiliate member or international associate of the AICPA. A member of CIMA is a Fellow or Associate of the Institute, and includes, for the purposes of the disciplinary powers and procedures of the Institute, a person who ceased to be a member on or after June 14, 2003. When used in this Code, the term member means a member in business or professional accountant in business and who is a CGMA (or entitled to use the designation CGMA).
Member(s) in business or professional accountant(s) in business A member who is employed or engaged on a contractual or volunteer basis in a(n) executive, staff, governance, advisory, or administrative capacity in such areas as industry, the public sector, education, the not-for-profit sector, and regulatory or professional bodies. This does not include a member engaged in public practice. 
Professional services Include all services requiring accountancy or related skills that are performed by a member for an employer, or on a volunteer basis. These services include, but are not limited to accounting, tax, bookkeeping, management consulting, financial management, corporate governance, business valuation and educational services. For AICPA members, it also includes those services for which standards are promulgated by bodies designated by AICPA Council. 
Public interest entity(ies) Public interest entities are (a) all listed entities, including entities whose shares, stock, or debt are quoted or listed on a recognised stock exchange or marketed under the regulations of a recognised stock exchange or other equivalent body, and (b) any entity for which an audit is required by regulation or legislation to be conducted in compliance with the same independence requirements that apply to an audit of listed entities. Members may wish to consider whether additional entities should also be treated as public interest entities because they have a large number and wide range of stakeholders. Factors to be considered may include (a) the nature of the business, such as the holding of assets in a fiduciary capacity for a large number of stakeholders; (b) size; and (c) number of employees. 
Public practice Consists of the performance of professional services for a client by a member or member’s firm. 
Rules The AICPA Code of Professional Conduct.
Safeguards Actions or other measures that may eliminate a threat or reduce a threat to an acceptable level. 
Those charged with governance The person(s) or organisation(s) (for example, a corporate trustee) with responsibility for overseeing the strategic direction of the entity and the obligations related to the accountability of the entity. This includes overseeing the financial reporting process. Those charged with governance may include management personnel (for example, executive members of a governance board or an owner-manager).
When an interpretation requires communicating with those charged with governance, the member should determine, considering the nature and importance of the particular circumstances and matter to be communicated, the appropriate person(s) within the entity's governance structure with whom to communicate. If the member communicates with a subgroup of those charged with governance (for example, an audit committee or an individual), the member should determine whether communication with all of those charged with governance is also necessary, so that they are adequately informed.
Threat(s) Relationships or circumstances that could compromise a member’s compliance with the rules or fundamental principles.