Developments in Ethics Guidelines for CPAs

• DOI: http://doi.org/10.1002/jcaf.22190
• Date: 01 October 2016
• Published date: 01 October 2016

63

© 2016 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI 10.1002/jcaf.22190

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Developments in Ethics Guidelines

forCPAs

Bradley P. Lawson, Angela Wheeler Spencer, and Monika Turek

INTRODUCTION

On June 1, 2014,

the American Insti-

tute of Certified

Public Accountants

(AICPA) issued a

revised Code of Pro-

fessional Conduct

(the Code).1 The

revised Code became

effective for members

of the AICPA on

December 15, 2014,

except for sections

of the Code related

to the Conceptual

Frameworks. These sections of

the Code were effective begin-

ning December 15, 2015.

While much of the revised

Code simply restructures the

previous rules into a more user-

friendly format, the revised

Code now also incorporates

nonauthoritative guidance,

including that issued by the

Professional Ethics Division of

the AICPA. Additionally, the

revised Code includes a concep-

tual framework approach, with

frameworks for members in

business and members in public

practice. This latter change is

particularly important in cases

in which the Code does not

explicitly address a particular

situation. Under those circum-

stances, failure to apply the

relevant Conceptual Frame-

work would result in a viola-

tion of the Code. Businesses

and members of their manage-

ment team, particularly those

holding the Certified Public

Accountant (CPA) designation

and those tasked with oversee-

ing the firm’s risk and ethics

compliance activities, need to

be aware of these

changes.

EXPECTATIONS FOR

ORGANIZATIONS

REGARDING ETHICAL

COMPLIANCE

Organizations

face compliance with

an ever-growing list

of responsibilities

and expectations

related to ethics

regulations. For

example, U.S.-based

organizations are

expected to comply with the

Foreign Corrupt Practices

Act, the Sarbanes-Oxley Act,

Federal Sentencing Guidelines,

and listing requirements of

the New York Stock Exchange

and NASDAQ. Countries out-

side the United States are also

adopting their own corporate

ethics regulations. Changes

contained within the AICPA’s

revised Code may likewise

impact companies employing

CPAs within their ranks. These

changes could impact the orga-

nization’s ethical compliance

The American Institute of Certified Public Accoun-

tants (AICPA) recently issued a revised Code of

Professional Conduct (the Code). Regardless of

whether or not they are members of the AICPA,

most CPAs are affected by this change as most

state boards of accountancy adopt the AICPA’s

Code as the ethical standard for CPA conduct

within their state. We discuss the revised struc-

ture of the Code and important developments for

all three types of CPAs contained therein. We also

provide an example of how to use and search the

AICPA’s new interactive, online Code of Profes-

sional Conduct. © 2016 Wiley Periodicals, Inc.

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