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Aicpa code of professional conduct 6 principles

05/11/2020 Client: papadok01 Deadline: 10 Days

AICPA CPC and Jurisdiction

The following principles and rules apply to certified public accountants (CPAs) in the

practice of a public accounting firm as previously described.

AICPA CPC Principles

The principles of the AICPA’s Code of Professional Conduct include the following

(Ethics and Independence, 2011):

Responsibilities that require that CPAs carry out their duties as professionals

exercising ethical and moral judgment in all aspects of their activities are

present.

Public interest trust is a principle of obligation to behave and demonstrate

professionalism and commitment to their trade.

Integrity is to be demonstrated in all aspects of their professional

responsibilities with the ultimate purpose of maintaining and broadening public

confidence.

CPAs are to remain independent and avoid conflict of interest situations in all

their duties and responsibilities.

They must exercise due care by members and observe standards of ethics and

professional technical nature in the continued strive for competence

improvement and quality of services.

Scope and nature of services should be limited to those regarding auditing the

financial statements, accounting, tax, financial planning, and litigation support

services.

AICPA CPC Rules

The AICPA Code of Professional Conduct rules are similar and include most of the

principles as described above but go beyond covering issues such as contingency and

referral fees, organization forms, and solicitation guidelines, which are geared

primarily to guide public accounting firms as responsible and ethical organizations

(Standards, 2011).

AICPA Jurisdiction

The AICPA Professional Ethics Executive Committee governs those CPAs that are in

its membership. But even if this committee extends its coverage to those accountants in

corporate, government, academia, and law, it must be CPA members of either the state

CPA societies or the AICPA for the committee to have jurisdiction over the member.

It is therefore imperative to recognize that not all, but only a percentage of, accountants

are CPAs. Most accountants working in corporations, government entities, nonprofits,

and law firms are not CPAs. Therefore, they are not required to follow the AICPA

CPC (intended to govern only CPAs primarily in the public accounting practice), nor

are they required to following the SEC ethical requirements.

It is very important to recognize that the rest of accountants—which are the majority—

are not governed by any of the rigorous codes of ethics and conduct presented here.

The question then remains as to which professional organization governs accountants

in these other professional arenas. The answer is that there is really no overarching

code, but the only one that applies is the code of ethics of the CPA's respective

organization.

Therefore, the code of ethics of each company then governs all accountants (not just

CPAs), and it is imperative that these codes of ethics of each entity (other than public

accounting firms) are properly set up and mirror those guidelines established by the

SEC, the SOX Act, and the AICPA.

References

Ethics and independence. (2011). Retrieved from the American Institute of Certified

Public Accountants Web site:

http://aicpa.org./InterestAreas/CenterForAuditQuality/Resources/CAQAuditLib

rary

Standards. (2011). Retrieved from the American Institute of Certified Public

Accountants Web

site: http://www.aicpa.org/RESEARCH/STANDARDS/Pages/default.aspx

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