Ethical helps and challenges.

• Author: Yetmar, Scott A.
• Position: CPA tax practitioners

EXECUTIVE SUMMARY

* While professionalism has been defined in many ways, two components essential to its definition are a high level of technical competence and adherence to high ethical standards.

* The ethical behavior of professionals may be affected by their personal values, their firm's formal policy, the organization's culture and the professional environment.

* Firms and managers can assist employees by refraining from explicitly or implicitly pressuring them to go against their ethical Values.

What helps CPA tax practitioners face ethical dilemmas encountered in practice? What will help them in the future? What challenges them in attempting to act ethically? This article, based on a study of AICPA Tax Division members, answers these and related questions.

While professionalism has been defined in many ways, two components essential to its definition are a high level of technical competence and adherence to high ethical standards.(1) CPAs engaged in tax preparation, reporting and planning activities clearly subscribe to this concept of professionalism. Like most professionals today, CPA tax practitioners are either managers or nonmanagerial employees within a business firm. In addition to dealing with a variety of ethical dilemmas affecting their professional obligations, they also must confront ethical dilemmas associated with managing or working in a business organization.

The ethics literature recognizes that professionals engaged in business (or other types of organizations) are influenced by a variety of factors when confronted with ethical dilemmas at work. The ethical behavior of professionals may be affected by their personal values, the firm's formal policy, the organization's culture and the professional environment (e.g., professional standards).

This article discusses a study conducted in November 1997 to learn about the factors that help and challenge CPA tax practitioners in responding to the various ethical dilemmas encountered in the course of their work. Surveys were sent to 1,000 CPA members of the AICPA Tax Division; responses were received from 265 participants (a 26.5% response rate).

Potential Helps

A key portion of the survey consisted of the 24 statements listed in Table 1 on p. 116 (potential helps). These statements reflect factors that might be helpful to tax professionals when faced with ethical issues. Those surveyed were asked to rate each statement on a five-point scale, in which "1" meant not helpful and "5" meant extremely helpful in responding to work-related dilemmas. If the particular item is either not available (e.g., the firm has no code of ethics) or not applicable, survey participants were asked to indicate "N/A"

Table 1: Potential helps Number Potential help H1 The AICPA's General Code of Conduct H2 The AICPA's Statements on Responsibilities in Tax Practice H3 The Internal Revenue Code (i.e., tax practitioner and taxpayer penalties) H4 Treasury Department's Circular 230 H5 Threat of losing one's CPA license for unethical conduct H6 The professional codes of other associations and/or professional designation programs not previously mentioned H7 Materials on ethics published by the AICPA H8 Materials on ethics published by your State Society of CPAs H9 Professional meetings where ethical issues can be discussed with other tax practitioners H10 Continuing professional education courses involving ethics training H11 Voluntary quality peer reviews H12 Professional ethics examination in order to receive the CPA certificate H13 Your firm's code of ethics or similar policy on ethical conduct H14 Ethics training provided by your firm H15 A program or individual in your firm to which you can report unethical conduct H16 A management philosophy in your firm which emphasizes ethical conduct H17 Clear communication of appropriate ethical behavior by the management of your firm H18 An environment/culture in your firm which does not encourage you to compromise your ethical values to achieve organizational goals H19 Ability to go to your supervisor(s) for information and advice on ethical issues H20 Ability to go beyond your supervisor(s) to higher levels for information and advice on ethical issues H21 The fact that your immediate supervisor(s) does (do) not pressure you into compromising your ethical standards H22 Help from your co-workers in resolving your ethical dilemmas H23 Your personal moral values and standards H24 Your family and friends who provide support and insight for you in resolving ethical conflicts Mean Number rating Rank H1 3.52 13 H2 3.50 14 H3 3.56 12 H4 3.31 16 H5 4.08 5 H6 2.50 24 H7 3.07 19 H8 2.96 21 H9 3.11 17 H10 3.11 17 H11 2.93 22 H12 2.57 23 H13 3.95 7 H14 3.50 14 H15 3.02 20 H16 4.29 3 H17 4.19 4 H18 4.38 2 H19 3.76 8 H20 3.70 11 H21 3.97 6 H22 3.72 10 H23 4.84 1 H24 3.73 9 Overall Findings

Table 1 shows the mean (average) ratings and rankings for each of the 24 potential helps based on the individual ratings (other than "N/A") given to each factor by the survey respondents. For example, potential help H14 (i.e., ethics training provided by your firm) had the fourteenth highest mean rating among the 24 potential helps in the survey.

The information presented in Table 1 suggests several points. The respondents find the majority of the resources listed to be helpful in resolving ethical dilemmas encountered in their work. Only H6, H8, H11 and H12 were below the midpoint on the...