Campus to clients: integrating tax ethics into the first tax course.

• Author: Nellen, Annette

TAX PLANNING AND COMPLIANCE ACTIVITIES are significant subsets of the overall responsibilities of tax accounting professionals. Students who study taxation encounter technical tax concepts and practice issues as they learn how to apply tax rules, minimize tax obligations, and report the results of tax transactions to the IRS. Because students generally are in the early stages of their professional development, they easily can be exposed to professional ethics issues and preferred professional behaviors in common ethical situations as they learn more about tax technical content and the practical implementation of those rules.

Background

Accountants who practice as CPAs in the United States are either directly subject to the AICPA Code of Professional Conduct (the AICPA Code) or indirectly governed by it through an incorporationby-reference process of their state licensing governing body. State boards of public accountancy require some testing on the topic of ethical responsibilities before granting an applicant CPA status, and they increasingly require regular continuing education in ethics.

The AICPA Code requires members to adhere to certain binding professional standards. In 1999, the AICPA governing Council authorized the AICPA Tax Executive Committee (TEC) to act as the Institute's professional standard-setting body in tax matters. Acting on that authority, the TEC issued Statements on Standards for Tax Services (SSTSs) and several related Interpretations. The SSTSs and Interpretations are available on the AICPA website at tinyurl.com/2dwaw69.

The SSTSs generally cover:

* Expected standards of support for positions that the CPA includes on tax returns;

* Approach to answering tax return questions;

* Reliance on information provided by clients and others;

* Using estimates on tax returns;

* Taking positions that vary from previously reported positions;

* Responsibilities upon learning of errors on prior returns; and

* Tax advice to clients.

Most tax textbooks contain some reference to tax ethical responsibilities and mention the existence of the SSTSs, but generally this coverage is limited and does not offer any depth in addressing tax ethical issues. Using materials prepared specifically for classroom use, the author has for many years expanded coverage of these topics in the introductory tax course, believing that an ethical foundation is the cornerstone upon which this profession is based, and therefore that accounting students should be exposed at multiple levels to the variety of ethical issues they might face it their careers.

Department Goals and Objectives

After extensive discussions, the Department of Accounting at Creighton University concluded that it was essential for all undergraduate accounting majors to be familiar with professional codes of conduct. In addition, the department thought students needed to study at least one such code and apply its tenets in a developmentally appropriate setting for undergraduate students. To adhere to these objectives, courses in the major should build on the two required ethics courses (one a classical, philosophical study of ethics and the other an applied business ethics course) that all Creighton business college students must complete to graduate. As a result, the department adopted a Professional Values Learning Goal and several supporting learning objectives for the program. To implement these goals and objectives, assessment processes were embedded into various courses. The progress on meeting these assessments is discussed in annual department meetings and modified as necessary. The learning goal and learning objective relevant to this column are:

* Learning Goal 1: Professional Values and Attitudes: Graduates of the Creighton Accounting Program .should possess an understanding of the...