...ETH/376 Accounting Ethics and Professional Regulations Week One Assignment – AICPA Code of Professional Conduct AICPA Code of Professional Conduct The AICPA Code of Professional Conduct represents the principles that “are based on the values of the profession and the traits of character that enable CPA’s to meet their obligations to the public” (Mintz & Morris, 2011). The AICPA Code of Professional Conduct has six essential principles to guide them in the performance of their profession. The six essential principles are: Responsibilities, the Public Interest, Integrity, Objectivity and Independence, Due Care, and Scope and Nature of Services. All these principles need to be follow by the members of the AICPA. These principles link the professional conduct to moral judgment and recognize the responsibility that CPA’s have to his or her clients as well as the public. AICPA Code of Professional Conduct Principles The AICPA Code of Professional Conduct have six essential principles. The first principle is call “Responsibilities”, which protects the public of irresponsible and immoral behavior. The second principle is “The Public Interest”, which protects the best interest of stakeholders that includes the clients, credit grantors, government, investors, etc. The third principle is “Integrity” because this principle identify the public trust and CPA’s need to be candid and honest while maintaining client confidentiality. The fourth principle is “Objectivity and Independence”...
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...AICPA Code of Professional Conduct The AICPA is an organization that the majority of CPAs voluntarily join. Many in the business world are aware of the AICPA Code of Professional Conduct. This code of conduct focuses primarily on the ethical and professional obligations of CPAs. Members commit to abiding by the principles of the organization which holds them accountable to stringent principles and rules which go above and beyond ordinary laws and regulations. Members are expected to be self-disciplined and conduct themselves ethically and morally at all times. The three most important purposes of the AICPA Code of Professional Conduct are to guide their members in carrying out their responsibilities, to protect the public interest, and to enforce integrity. The AICPA Code of Professional Conduct reminds members that they should always exercise sound moral judgments and to remember they have a responsibility to their clients and the public to make professional decisions that are both ethical and moral. If CPAs were not responsible, society would lose all respect for the profession. There would not be a safe and fair way to judge the financial stability of companies or markets. When CPAs take responsibility and act professionally, ethically, and morally, their clients and the general public can feel confident they are reviewing accurate and credible financial statements of companies or organizations. It is crucial for CPAs to protect the public interest. The public interest...
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...The American Institute of Certified Public Accountants (AICPA) was originally founded in 1887. The AICPA founded accounting as profession, which is distinguished by high professional standards, strict educational requirements, a detailed code of professional standards, and a commitment to serving the public interest. In the early years of the organization rules and regulations were drafted. During the 1970s the responsibility of setting generally accepted accounting principles (GAAP) was transferred to the Financial Accounting Standards Board (FASB). The AICPA provides training, professional skills, programs, services, and publications to its 394,000 members. The AICPA Code of Professional Conduct consists of rules and principles. The principles provide the framework for the rules and rely on the professional conduct and knowledge of its members. The code is considered the foundation of ethical reasoning in accounting because it addresses all aspects of the accounting process in detail. The code of professional conduct expresses the profession’s responsibility to the public, colleagues, and clients. The code defines the expectations of individuals as a voluntary act within guidance of the principles. I believe the three most important purposes of the AICPA Code of Professional Conduct to be in Section 53 – Article II – The Public Interest, Section 55 – Article IV – Objectivity and Independence, and Section 54 – Article III – Integrity. Article II, The Public Interest, states...
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...Week 4 Code of Ethics Name Devry University Accounting 525 Veliota Drakopoulou, PhD 01/30/2016 Abstract The American Institute of Certified Public Accountants (AICPA) has made a Code of Professional Conduct that establish an ethical standard for public accountants in the US. The Generally Accepted Accounting Principles (US. GAAP) wants to collaborate with IFAC in order to resettle the principle accounting standards, but the rules and the ethics for professional and the financial reporting statements make a big difference. According to the article “It's Time for Principles-Based Accounting Ethics”, the American Institute of certified public accountants (AICPA) established standards that public accountants in the United States need to follow. The article argues for this code of conduct to be replaced with a code of ethics, which the authors believe to be superior to the rules-based standards currently in place, and attempts to present a solution by centering the AICPA code rules around different virtues such as objectivity, integrity, inquisitiveness, loyalty, and trustworthiness and analyzing the rules-based standards. This paper will argue whether the authors are correct in stating that a code of ethics should do more than establish minimum acceptable standards; describe the five cardinal virtues of professional accountants; differentiate between the rules-based and principles-based accounting standards; and finally compare and contrast the AICPA’s code of Professional...
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...AICPA Code of Professional Conduct Teresa K. Grimm 376 September 2, 2013 Sylvia Baughey AICPA Code of Professional Conduct I will be describing what the main reason of having the AICPA Code of Professional Conduct and why it’s the foundation of the ethical reason in the accounting world. I will also try to explain what I believe to be the most three important principles and why they are the most important. The main reason behind the AICPA Code of Professional Conduct is to uphold the standards and values of behavior in the community for all involved in the accounting profession. All of the principles of the AICPA Code are aspirational statements that form the main foundation for the Code’s enforceable rules. (Mintz & Morris, 2011) There are six principles to the code of professional conduct and they are, the public interest, objectivity and independence, due care, integrity, responsibility and scope and nature of services. (AICPA, 2013) When a member is using the Principles it will help guide him or her in a performance of his or her professional responsibilities and the call for an unyielding commitment to honor the public trust, even if it is at a sacrifice of personal benefits. (Mintz & Morris, 2011) I think the most three important principles of the Code would be integrity, the public interest and due care. Integrity is so important when a CPA is working with the public, because the CPA needs to gain the trust and confidentiality of his or her...
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...TSBPA Code of Professional Code Question 1 | | 10 / 10 points | Texas State Board of Public Accountancy regulates the practice of public accountancy in Texas. | | True | | | False | Question 2 | | 10 / 10 points | Membership in the AICPA is voluntary, but by accepting membership, a CPA assumes an obligation of self-discipline and agrees to adhere to the Code. | | True | | | False | Question 3 | | 10 / 10 points | The AICPA Rules of Conduct apply to all professional services performed. | | True | | | False | View Feedback | Question 4 | | 10 / 10 points | The AICPA Code of Professional Conduct provides practical guidance to only members in public practice. | | True | | | False | View Feedback | Question 5 | | 10 / 10 points | The AICPA Code of Professional Conduct defines the term member as members in business, members in public practice and members in government. | | True | | | False | View Feedback | Question 6 | | 10 / 10 points | In considering general ethics, the primary goal is to arrive at a set of acceptable methods for making ethical decisions. | | True | | | False | Question 7 | | 0 / 10 points | The AICPA Code of Professional Conduct is a collection of codified statements issued by the American Institute of Certified Public Accountants that outline the maximum ethical standards that must be followed by CPAs. | | True | | | False | Hide Feedback | | | The AICPA Code of Profession Conduct outlines...
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...Auditing and Assurance Services, 15e (Arens) Chapter 4 Professional Ethics Learning Objective 4-1 1) Ethics are: A) needed in the professions, but is not needed for society in general. B) a set of moral principles or values. C) not formed by life experiences. D) always incorporated in laws. Answer: B Terms: Ethical Principles Diff: Easy Objective: LO 4-1 AACSB: Ethical understanding and reasoning abilities 2) ________ means that a person acts according to conscience, regardless of the situation. A) Caring B) Fairness C) Integrity D) Respect Answer: C Terms: Ethical principles and integrity Diff: Moderate Objective: LO 4-1 AACSB: Ethical understanding and reasoning abilities 3) One of the main reasons people act unethically is that they choose to act selfishly. A) True B) False Answer: A Terms: Ethical Principles Diff: Easy Objective: LO 4-1 AACSB: Ethical understanding and reasoning abilities Learning Objective 4-2 1) A six-step approach is often used to resolve an ethical dilemma. The first step in this process is to: A) identify the alternative actions available. B) identify the ethical issues from the facts. C) determine who will be affected by the outcome of the dilemma. D) obtain the relevant facts. Answer: D Terms: Ethical dilemma Diff: Moderate Objective: LO 4-2 AACSB: Ethical understanding and reasoning abilities 2) Describe an ethical dilemma that an auditor or an accountant might face in his...
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...AICPA Code The purpose of the AICPA Code of Professional Conduct (“Code”) and why it is considered the foundation of ethical reasoning in accounting is that it is a code that has been established and agreed to by members of the AICPA. This is important in that is establishes a foundation of ethical reasoning in that a regulatory body isn’t issuing rules, the Code was established and agreed to voluntarily by CPAs who are members of the AICPA. I believe the three most important purposes of the AICPA Code of Professional Conduct (“the Code”) are the following: 1. Establishment of rules related to the Public Interest 2. Establishment of rules related to Objectivity and Independence 3. Establishment of rules related to Due Care The following are reasons why I believe the three purposes of the Code, as stated above,are the three most important. My reasons are central to the belief in maintaining trust in the CPA profession after issues such as the Enron and Arthur Andersen scandal. Public Interest CPA’s conduct many types of engagements for a variety of stakeholders which rely upon CPAs to have the interests of the public in mind. The Code states this concept well as “a distinguishing mark of a profession is acceptance of its responsibility to the public. The accounting profession's public consists of clients, credit grantors, governments, employers, investors, the business and financial community, and others who rely on the objectivity and integrity of certified public...
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...accounting at an all-time low, there is a need to reinvent the profession. The following pages of this research paper will examine the Model of Organizational Trust, and its three elements of ability, benevolence, and integrity. The three elements will be defined and explained using support from peer-reviewed articles. The report will also discuss the ways in which the elements are incorporated in the AICPA’s Code of Professional Conduct. The elements will be examined to learn the ways in which they help to promote trust in the accounting profession and finally, suggestions will be proposed to help improve public trust in the accounting profession. Introduction An essential component every profession must possess in order to garner satisfaction and commitment from clients and customers is trust. Trust cannot be gained quickly; it is developed over time through interactions, observations, and an understanding of another’s beliefs and values (Mayer, Davis, Schoorman, 1995). However, a person’s stated beliefs do not often dictate their behavior. In pursuit of professional goals, individuals often set aside what they know to be right and act in a manner that benefits them either financially, with recognition, or in some other manner (Six & Sorge, 2008). Over the past decade, the accounting profession has seen an erosion of public trust. Numerous financial scandals have brought heavy regulation and burdensome laws to which companies and accountants must comply, these scandals have...
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...“AICPA Code of Professional Conduct” ETH/376 The American Institute of Certified Public Accounts (AICPA) Code of Professional Conduct is a body of principals that has a goal to guide Certified Public Accountants (CPA’s) in the “performance of it professional responsibilities” (Mintz, 2011). The AICPA Code of Professional Conduct has six essential principles and they are: Responsibilities, the Public Interest, Integrity, Objectivity and Independence, Due Care, and Scope and Nature of Services. Each of these principles is meant to be followed by the members of the AICPA. These articles are used to explain the responsibilities that CPA’s have to clients, colleagues and to the public. The first principle, Responsibilities, protects the public of irresponsible and immoral behavior. The Public Interest makes sure the public’s best interest is protected. The third and fourth principles guarantee that the trust of the public is greatest served; integrity, honesty and confidentiality are of highest importance, as well as objectivity and impartiality. The fifth principle deals with the level of quality service and competence that the public receives and deserves. The sixth principle ensures that CPA’s have good internal controls put into place, and makes sure that CPA’s are unbiased and free of conflict when performing an audit for a client. These principles are put into place to protect the public and also to protect CPA’s, because as they follow them they will ensure that...
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...Certified Public Accountants’ Responsibility to Clients and the Profession Abstract The professional responsibilities of a Certified Public Accountant (CPA) to their clients were investigated. The responsibilities were determined by the American Institute of Certified Public Accountants Code of Professional Conduct. Specifically, Rule 102 regarding integrity and objectivity was used to determine what constituted as integrity and objectivity in the practice of a CPA acting as the moral conscience of their client. Rule 301 was used to determine whether information should be disclosed in the instance of fraud. Based on the information in the code of professional conduct, it was determined that CPAs have a responsibility for the greater public interest in determining the appropriate actions to be taken regarding potential fraud. Certified Public Accountants (CPAs) providing services such as accounting, taxation, audit, attestation, and other related services have a responsibility to serve small businesses as a moral conscience. Small businesses are focused on growing their business. As a result, the small business has big dreams. Many times the owners of small businesses are good at doing the service they perform; however, they often prefer that licensed professionals oversee the accounting function. Although CPAs have a responsibility to their clients they are not to act as the moral conscience, rather, they should act as a moral conscience, CPAs should turn in...
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...Accounting professionals are obliged to comply with certain standards in an effort to protect shareholders and the general public. When one joins any of the accounting professional organizations, such as the American Institute of Certified Public Accountants (AICPA), the Institute of Internal Auditors (IIA) or the Institute of Management Accountants (IMA), one is agreeing to adopt the ethical code. This professional code is a positive set of statements and guidelines for CPAs with explicit rules as to what accountants should or shouldn’t do. It applies to all members, whether it is public practice, industry, government or education. There are many reasons why one would want the accountant representing them to adhere to a specific rules and regulations. From an investor’s point of view, one would want an accountant that is going to have their best interests in mind, but to also be morally and ethically bound to perform within legal confines. Sometimes actions may be considered within acceptable limits of the law, but not ethically suitable; in such instances, the code of ethical conduct is even more important. Investors want insurance that the corporation with which they are financially backing is transparent. Transparency, which from an accounting/corporate standpoint, is the free flow of information within an organization and between the organization and its many stakeholders. This transparency and accountability improves the credibility and the relationship between...
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... Re: Professional Responsibilities of a Certified Public Accountant (CPA), and the differences between an audit and a review “Accountants, as professionals, are expected to maintain a level of ethical conduct that goes beyond society’s laws” (Schroeder, Clark & Cathey, 2005, p. 563). Therefore, the American Institute of CPAs (AICPA) established a Code of Professional Conduct to ensure public confidence in the quality of services provided by CPAs (Schroeder, et al., 2005). The June 12, 2012 Code of Professional Conduct list the Principles as; Responsibilities, Public Interest, Integrity, Objectivity and Independence, Due Care, and Scope and Nature of Services (AICPA, 2013). The principle of responsibilities requires the CPA to perform their responsibilities as professionals, by exercising sensitive professional and moral judgments on activities (AICPA, 2013). The principle of public interest requires the CPA to approach duties in a way that serves the public interest, honors the public trust and demonstrates commitment to professionalism (AICPA, 2013). The principle of integrity requires the CPA to maintain and expand public confidence, and execute professional duties with the highest level of integrity (AICPA, 2013). The principle of objectivity and independence requires the CPA to be free of conflicts of interest and independent in fact and appearance when performing audit and attestation services (AICPA, 2013)....
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...AICPA Code of Professional Conduct Katie Bradbury University of Phoenix ETH/376 The AICPA is the world’s largest association to signify accountants. Founded in 1887 the AICPA is formed out of 350,000 members in 128 different countries. Upon the establishment of the ACIPA, its creation of accountancy as a profession well-known for educational requirements, high professional standers and a strict code of professional ethics. The AICPA is considered to be the foundation of ethical reasoning in accounting because it covers everything from independence to due diligence. The Code of Conduct is basically, a guideline for every CPA and accountant to follow in there career. There are several purposes to the Code of Professional Conduct but three purposes I feel are the most important. I believe after reading the AICPA Code of Professional Conduct the three most important purposes are to protect the investor, to protect the creditor and to protect the employee. The AICPA’s mission is to provide members with the resources, information, and leadership that will enable them to provide valuable services in the highest standards to benefit the public, employers and clients. I feel protecting the investor, protecting the creditor, and protecting the employee are the most important because these are key people that make the company what it is. I feel this is done by responsibilities, the public interest and integrity. Professional CPA’s have responsibilities to protect all those who...
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...AICPA Code of Professional Conduct Lucinda M. Joslin ETH/376 27 April 2015 Susan Paris AICPA Code of Professional Conduct Just as a doctor is expected to act within certain ethical standards when entrusted with a person’s life, so is a CPA expected to be ethical when handling someone else’s money. With several hundred thousand CPA’s as members, the American Institute of Certified Public Accountants’ (AICPA) code of professional conduct principles are viewed as the ethical guidelines for CPA’s. Of the AICPA’s principles, the three that I feel are the most important are integrity, objectivity and independence, and due care. Body The first principle that I feel is most important is integrity. For me integrity is a character trait. I view a person to have integrity if they are someone who will do what is right no matter who is watching, or what the situation is. Since a CPA has to be viewed an honest and there to serve the public trust, they must have integrity. The next principle that I feel is important is for a CPA to have objectivity and independence. A CPA must not have any conflicts of interest and be unbiased to be able to meet their professional responsibilities in an objective manner. The independence of a CPA is something that they must strive to maintain. Since perception is often reality for people, a CPA needs to avoid situation that can be perceived as having a relationship with a client that could cause the CPA’s independence to...
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