Accounting Ethics: AICPA Ethics Code EXAM 2023

Ethical Decision Making model 1: recognize ethical issue 2: gather critical facts 3: identify stakeholders 4: consider alternatives 5: consider effect of stakeholders 6: consider comfort level 7: consider rules, regulations, and laws 8: make decision 9: document efforts 10: evaluate outcome professional organizations federal gov entities state gov entities accountants are subjects to the rules and regulations of these three entities aicpa this is a national professional org for CPAs, providing resources and information to members and coordinate activities with state cpa societies professional ethics division of the aicpa this promulgates the aicpa code of professional conduct and sanctions members for violations state cpa society oscpa, state-wide professional org of CPAs, provide info and resource on national and state wide issues, may advocate for or against legislation and regulation IFAC this group encourages global adoption of high ethical standards, aicpa is a member of this sec empowered by congress to regulate financial reporting by publicly held companies, also establish and enforce rules on accounting and auditing, and independence rules pcaob created by sox in 2002, overseen by sec, establish rules with respect to auditing and other attestation engagements, quality control of audits, and independence of pubic company audits irs this is a branch of us treasury which is authorized by the IRC to issue rules and regulation to enforce us tax law, circular 230 governs fed tax practice CPAs, enrolled agents, etc GAO issues rules with respect to government audits, often referred to as the yellow book these include ethics and independence rules that apply to individuals and entities that carry out these audits DOL issue rules with respect to the audit of employee benefit plans including independence rules that apply to such auditors insurance regulators this group is regulated by states, audits of insurance entities may be governed to some extent by state statutes and/or rulings of state insurance commissions state board of public accountancy this group issues your cpa license, frontline of oversight of ethical behavior, cpas must follow the rules and standards of the state they are licensed in follow the most restrictive requirements if youre auditing a publicly traded entity, you may be subject to independence rules of multiple entities: aicpa, sec, pcaob. if so, whose rules do you follow? 6 pillars of the aicpa code 1) responsibilities 2) public interest 3) integrity 4) objectivity and independence 5) due care 6) scope and nature of services responsibility pillar: in carrying out your professional responsibilities you should exercise sensitive professional and moral judgment