IFAC and APB: Ethical Standards for Accountants Essay

“ In order to prevent fraudulent financial reports and statements, the American Institute of Certified Public Accountants(AICPA) has created ethical standards” (Ethical standards in a financial statement, 2011). These standards aim to make financial professionals accountable for their accounting practices. This includes the integrity of financial reporting and ensuring financial reporting is done fairly and factually. Financial accountants and professionals should maintain professional integrity, objectivity, and independence to reduce the risk of resulting legal action, loss of profits, and a poor reputation if improper financial reporting is done (Ethical standards in a financial statement, 2011).

Accountants are held to a higher ethical standards and they must performed their duties in compliance with standards or ethical values of honesty, integrity, objectivity, due care, confidentiality, which must be fully committed to. They must put clients or public interest first before their own. They must have and ethical values and maintain those values way beyond what the society or the company’s code of ethic. It is important that accountants’ behavior or ethical values is in conformity with the

     The accounting system is constantly changing. During these changes, it is important for accountants to adhere to the high ethical standards that they have always lived by. Adhering to the high ethical standards is an accountant's obligation to the public, the profession, and themselves. An accountant's ethical conduct usually lies within four different areas. This includes competence, confidentiality, integrity, and objectivity. NYSSCPA.ORG states, "Members also have a continuing responsibility to cooperate with each other to improve the art of accounting, maintain the public's confidence, and carry out the professions special responsibilities for self-governance," (Article 1).

AICPA Code of Professional Conduct is the code of conduct that required each member of the organization to follow rigorously and act with integrity, objectivity, due care, competence, fully disclose any conflicts of interest (and obtain client consent if a conflict exists), maintain client confidentiality, disclose to the client any commission or referral fees, and serve the public interest when providing financial services. Accountants are relied upon to be trustworthy and maintain high ethical standards. It is because of the nature of the profession that puts them in a position of trust with people who rely on their professional judgment and guidance in making decisions. These decisions are extremely important in accounting

Accountants and auditors are often faced with having to make decisions that bring ethics into question. The American Institute of Certified Public Accountants (AICPA) sets the standards for professional conduct that dictates what accountants are allowed to do and what they are not allowed to do. However, issues do arise that have not been addressed by the AICPA and when this occurs it is up to management to use their best judgment to make a determination about the ethical implications of their actions (Allen, 2011).

The AICPA’s Code of Professional Conduct was first implemented for the accounting profession in 1988 and has since seen many revisions as the profession has changed. In 2014-2015, the AICPA codified a newer version that includes a “Conceptual Framework for Members in Business” and a “Conceptual Framework for Members in Public Practice.” (page 6, section .01) AICPA’s Code of Professional Conduct is written for Certified Public Accountants who are practicing in the United States and does not apply to accountants practicing elsewhere. Integrity is one of the most important principles for any professional and the AICPA recognizes the need to establish guidelines for how integrity should be implemented

Limited access to records and assets can really make it hard for someone in an organization to commit fraud. If the accounting department never has access to the actual money and the people in charge of the money have no access to the accounting of the organization other than sending them the info over that the

In the wake of accounting malpractices across several companies in the United States such as Enrol Corporation, Tyco International and WorldCom, there has been a lot of attention with regards to the accounting practices in the corporate sector. Specifically, the Sarbanes – Oxley Act (SOX) which was passed by congress in 2002, was aimed at addressing the situation by regulating fraudulent accounting practices such as bribery and wrong entries in books (Williams & Elson, 2010). While regulation has its own limits, it is hoped that ethical principles can go a long way in keeping accountants in check. To this end, a number of institutions formulated within the accounting professions such as the AICPA have come up with codes of conduct to guide the action of members and ensure that they act in a way that is morally right and in line with the profession.

Ethics in any industry is important, but for Accounting professionals and those in need of their services, it is a particularly stressed element. Information provided by accountants is used to make major decisions, including investing, downsizing, expanding, etc, so accountants are expected to be competent, reliable, and have a high degree of professional integrity. Because of these high expectations, the professional accountancy industry, like many other professions, has adopted professional codes of ethics (Woelfel, 1986). These ethical codes go above and beyond the requirements for state or federal laws and regulations. There are several professional organizations within the

Businesses, investors, creditors rely on accounting ethics. The accounting profession requires honesty, consistency with industry standards, and compliance with laws and regulations. The ethics increase the responsibility and integrity of accounting professionals, and public trust. The ethical requirements influence the management behavior and decision-making. The financial scandal of Enron and Arthur Anderson demonstrates the failure of fundamental ethical framework, such as off-balance sheet transactions, misrepresentation of financial statements, inaccurate disclosure, manipulations with earnings, etc. The confronted accounting profession and concern for ethics in businesses forced regulators to revise the conceptual framework of accounting processes.

The AICPA Code of Professional Conduct provide guidance and rules for certified public accountants’ professional and ethical responsibilities. The code establishes standards for auditor independence, integrity and objectivity, responsibilities to clients and colleagues and acts discreditable to the accounting profession. The AICPA has established a conceptual framework for issues and threats that are not otherwise address in the code. The AICPA Conceptual Framework is a four-step approach consisting of identifying threats to compliance with the rules, evaluating the significance of the identified threats, identifying new and existing safeguards, and evaluating safeguards to determine if threats are reduced to an acceptable level.

Imagine trusting your hard-earned money like your retirement savings to a financial adviser or Certified Public Accountants (CPA) only to lose it all in a fraudulent Ponzi scheme. In today’s world of business many organizations, financial planners and accountants are in the news due to the financial ethical breaches that have affected their customers, employees, and the general public. A CPA has to be responsible for their audits and take any punishments as a result of their mistakes, incompetence or illegal actions. CPAs are expected to have integrity in their work,

This dilemma in this ethical case is whether or not Daniel Potter (Dan), staff accountant for Baker Greenleaf accounting firm, should report unethical changes his immediate supervisor, Oliver Freeman, made to an audit report. The problem is that a large piece of real estate was valued on the balance sheet at $2 million. Dan had estimated the property at $100,000. Dan based his value estimate on the condition, location, and how long the property had been vacant. He approached the managers of the subsidiary with a proposal to write down the value of the property by

A code of ethics is necessary for the success of any type of business whether it be a professional service organization such as a law firm or an accounting firm, a manufacturing company such as Chrysler, Toyota, Apple or Microsoft, or a retail company such as Walmart or Target. Within each type of organization lie various types of services that are governed or controlled by a specific set of standards and code of ethics. Each set of standards and code of ethics is designed by a specific governing body. Management accounting is one such branch of service that is regulated by the Institute of Management Accountants (IMA) of the United States. As the regulating authority, the IMA has “adopted an ethical code called the Statement of Ethical Professional Practice that describes in some detail the ethical responsibilities of management accountants” (Garrison, Noreen, and Brewer, 2015, p.9). “The IMA Committee on Ethics encourages organizations and individuals to adopt, promote, and execute business practices consistent with high ethical standards, by providing valuable insight in response to our changing profession. The Committee upholds IMA’s Statement of Ethical Professional Practice and provides subject-matter expertise to members of IMA for resolution of ethical conflicts” (IMA Committee on Ethics).

This research paper is on Rules of Professional Ethics and Conduct of the American Institute of Certified Public Accountants. They will be four cases that will be discussed for violation for the following rules. They are Rule 102 – Integrity and Objectivity, Rule 201 – Professional Competence, Rule 202 – Compliance with Standards, and Rule 501- Acts Discreditable. They will be 4 main points that will be discussed on