EHT/376 The Purpose of the AICPA Code of Professional Conduct The Code of Professional Conduct of the American Institute of Certified Public Accountants is a voluntary association of Certified Public Accountants. This code is used to discuss the ethical obligations of CPAs and to provide guidance and rules to all accounting professionals in public practice. I believe that the Code of Professional Conduct is considered as the foundation of ethical reasoning in the accounting profession because every CPA has an ethical responsibility and a commitment to the public, to clients and to colleagues of honorable behavior, even at the expense of personal advantage. Following I will discuss the three main purposes of the AICPA Code of Professional Conduct and why I believe these three purposes are most important (Mintz & Morris, 2011, Pg 50) . The purpose of the AICPA Code of Professional Conduct includes responsibilities, the public interest, integrity, objectivity, independence, due care and scope and nature of services.
Each of us has such a set of values, although we may or may not have consider them explicitly. Robert H. Montgomery, describing ethics in accounting is accountants and the accountancy profession exist as a means of public service; the distinction which separates a profession from a mere means of livelihood is that the profession is accountable to standards of the public interest, and beyond the compensation paid by clients. In section 100, Introduction and Fundamental Principal in IESBA Code of Ethic for Professional Accountants, state that a professional accountant shall comply with the following fundamental principles. The first principle is integrity. Integrity is under section 110.
The AICPA have several publication that helps with guiding the accounting profession and to enhance the member’s technical and professional abilities. One thing that the AICPA requires of their Accountants and CPAs is to continue with professional education, so that they will stay abreast of all current accounting and business issues. The AICPA is considered the foundation of ethical reasoning in accounting because each individual in the accounting profession whether they are certified or not has the obligation to be ethical with the public in business dealings and having access to financial information. All
Caldwell et al. (2006) noted that the duties of stewards were fraught with a complex set of ethical obligations. Many professional codes of ethics or rules are supposed to govern the ways and actions or conduct of laws given by the professionals within a professional business for you. Group of professionals generally sets these rules so that their professional peers see anyone who violations one of these rules of conducts are in violation of this rule as disapproval. The moral ethical standards of a society provide the basic guidelines for corporate ethical stewardship existence and allow us to resolve conflicts by social existence and allow us to resolve conflicts by appeal to shared principles of justification.
GAAP stands for Generally Accepted Accounting Principles. The common set of accounting principles, standards and procedures that companies use to compile their financial statements. GAAP are a combination of authoritative standards (set by policy boards) and simply the commonly accepted ways of recording and reporting accounting information. GAAP are imposed on companies so that investors have a minimum level of consistency in the financial statements they use when analyzing companies for investment purposes. GAAP cover such things as revenue recognition, balance sheet item classification and outstanding share measurements.
Foundation of ethical reasoning in accounting The AICPA is considered the foundation of ethical reasoning in accounting because its principles are a guide to members for how they are expected to perform their professional responsibilities. As an organization their aim is to instill in its membership according to ET Section 51- Preamble “The principles call for an unswerving commitment to honorable behavior, even at the sacrifice of personal advantage (AICPA.org 2006-2014). The principles are simple and direct. The principles of the AICPA are responsibilities to the public interest, integrity, objectivity and independence (independence applies to CPAs in public practice), due care, and scope and nature of services--revised May 15, 2000 (AICPA.org, 2006-2014). These principles are exemplary ideals for the accounting profession in the performance of their professional responsibilities.
AICPA Code of Professional Conduct ETH/376 May 31, 2014 University of Phoenix AICPA Code of Conduct The AICPA is better known as the American Institute of Certified Public Accountants. The phrase Certified Public Accountants is better known as CPAs. The AICPA has a code of conduct which is used to determine the ethical duties or obligations of the CPAs. (Accounting @ suite 101) The foundation of ethical reasoning and the maintaining of the Code of Professional Conduct is done by the AICPA. One of the most important purposes of the code of conduct is to maintain an honest and trustworthy relationship with the public and their interests.
These principles are strictly set in place to “represent the expectations for CPAs on the part of the public in performance of professional services” (Mintz & Morris, 2011.). After reading chapter one from Ethical Reasoning: Implications for Accounting, the three most important principles are responsibilities, public interest, and integrity. Responsibilities According to Eber (2004) This principle states that members need to exercise sensitive professional and moral judgments in all their activities, are responsible for cooperating with each other to improve the art of accounting and should maintain the public's confidence and enhance the traditions of the accounting profession (The AICPA Code of Professional Conduct, Responsibilities). Responsibilities are first out of the six principals for the AICPA Code and the third most important principle. This principal is what helps guide professional members in performance and to honor public trust.
Question Critically compare and contrast the codes of ethics/professional conduct of either (a) The institute of Chartered Secretaries Zimbabwe (ICSAZ) or (b) the Institute of Chartered Accountants of Zimbabwe (ICAZ) against the International Federation of Accountants (IFAC) code of ethics. Accounting being a profession demands the responsibility to act in a ethical manner. Ethical behaviour is one of the principally vital aspects of the accounting profession besides the need for the technical expertise. A Code of Ethics is a document which guides professional accountants in the exercise of their duties, in business, decision making and their behaviour as accounting professionals. Although there has been harmonisation of the profession worldwide every country has its own national standard setting bodies and there are also some found at a regional level like in Southern Africa there is Southern Africa Association of Accountants (SAAA).
Mr. President, everyone at LJB needs to understand the definition of internal control and what is required of them under the SOX law since this law requires a combined effort from top management and employees alike. Internal control “consists of all the related methods and measures adopted within an organization to safeguard its assets, enhance the accuracy and reliability of its accounting records, increase efficiency of operations, and ensure compliance with laws and regulations” (Kimmel, Weygandt & Kieso, 2009, pp. 327-328). In other words, effective internal control can help companies achieve established financial goals, prevent loss of resources, and prepare reliable financial statements. Under SOX, all publicly traded U.S corporations are required to maintain an adequate system of internal control by means of developing principles of control over financial reporting as well as continually verifying that these controls are working.