Accounting Code of Professional Conduct: References..APA Citation

Accounting Code of Professional Conduct: References..APA Citation

AICPA Code of Professional Conduct, Section 56 - Article V: Due   Care. Retrieved October 11, 2011 from: http://www.aicpa.org/ResearchStandardsCodeofConduct/ Pages/et_56.aspx

Clikeman, P. M. 2003. Educating for the public trust. CPA Journal, 73(8), 80.

Cohen, R., Pant, L.W. (1991). “Beyond bean counting: Establishing high ethical standards in the public accounting profession”. Journal of Business Ethics, 10,45-56.

Collins, A., Schulz, N. (1995). “A critical examination of the AICPA Code of Professional Conduct”. Journal of Business Ethics, 14, 31-41.

Fatt, J. (1995). Ethics and the Accountant. Journal of Business Ethics, 14(12), 997-1004.

Koumbiadis, N. J., & Okpara, O. 2008. Ethics and accounting profession: An exploratory study of accounting students in post secondary institutions. International Review of Business Research Papers. 4(5), (pp.147-156). October-November 2008

Professional judgment, Benevolence and the AICPA Code of Professional Conduct

Benevolence and the AICPA Code of Professional Conduct

Accepting to perform a given responsibility to the public marks a profession according to AICPA Code of Professional Conduct. AICPA has tried to enhance benevolence by playing a bigger role in the accounting profession.  Setting the auditing standards has increased the users of financial statements. It ensures clients receive quality services from the accounting professional. The code states that CPAs are to act with a mission of serving public interest, demonstrating commitment and honoring public trust. An accounting professional therefore should do well to the public with a no personal profit-making motive. Professionalism should be basic in their work. They should act to serve the public interest instead of their personal interest (AICPA section53).

Given the provision of the AICPA code of ethics, compliance to it depends on the members’ willingness to do it. The clients’ belief is that the CPAs comply with the code while offering services to them. It is therefore important for an accountant to have a will of protecting the interest of the client. Through meeting the clients’ needs is an indication of loyalty. AICPA code of ethics requires the auditor to maintain confidentiality. The client will feel protected when the accountant keeps his information confidential. The accountants on the other hand should not use the information for self or financial interests.

AICPA has sought to advance the investor education through training as well as by providing advanced methods of financial reporting. It has promoted strong corporate governance and internal control system that ensures fair information is presented to the public companies (Clikeman, 2003).

Professional judgment and AICPA code of ethics

Professional judgment is the process through which accounting professionals resolve ethics dilemmas using professional norms and standards to make ethical accounting decisions. Professional interest prevails over personal interest. The code of accounting ethics provides rules and guidance to members in which to base their operation. The rules and guidance reflect modern needs and issues of the members in the profession. Members who adhere to the code are able to make ethical decision.  American Institute of Public Accountants provides professions’ authority relative to making ethical decisions (Fatt 1995).

Ethical decision making in an individual relates to his or her ethics system, ethics application, moral reasoning perspective and the level of moral reasoning. Effective professional judgment therefore depends on these characteristics in the resolution of accounting dilemma. AICPA code of professional conduct forms the base of accounting professional judgment, which is opposed to the personal judgment. Personal judgment is based on the personal ethics. The codes establish professional norms and standards that are important in establishing public trust in the service.

Integrity, Ability and the AICPA Code of Professional Conduct

Ability and the AICPA Code of Professional Conduct

Professional accountants’ competence is an indication of accounting profession’s credibility. Competence helps determine the level in which the public can trust the accountants in offering services. (AICPA, 2004, section 56) requires the accountants to have acquired technical and ethical professional knowledge and to learn on the job continually in order to maintain and improve their competence. According to rule, 201 CPAs should undertake tasks they can complete with professional competence. They should continuously strive to add value in their services. Their concern should be on the interest of the client.

According to item 02, continuous education and experience is the base of competence in accounting profession. Besides being a certified public accounts, one needs to enrich his or her competence through further education and profession al improvement. Professional ability enables a CPAs to maintain a level of understanding while using facilities to render services to the client. A CPA is able to evaluate the adequacy of his knowledge and experience to handle a given task. Item 04 of the code requires members to discharge responsibilities to the client with diligence.  Their work should be thorough in relation to the standards.  The AICPA code of conduct therefore requires the professionals to take due care through planning and supervising of their work.

 Integrity and the AICPA Code of Professional Conduct

 Integrity is a virtue of character that enhances professional recognition. Integrity acts as a benchmark to which the public can test the reliability of the accountant’s decisions. Clients use CPAs’ integrity to judge the quality of services they offer. Members of the profession should therefore perform their work demonstrating a high level of integrity. They should observe the code of professional ethics in deciding the type and the scope of the work to do (AICPA, 2004, section54).  Members in execution of their duty should be objective and independent. They should not have conflicting interests but should strictly observe the code of professional ethics.

Accounting principles and standards should remain relevant to members at all times in duty.  To maintain integrity in their work, CPAs should practice their work with quality internal control structure to ensure the work is supervised. They should also exercise individual judgment in order to find whether the activity is in relation to their role. They should keep judgment private without misrepresentation (Cohen& Pant, 1991). Behavior contrary to the accounting principles and standards undermine integrity and create distrust (Collins, Schulz, 1995).