The AICPA Code of Professional Conduct is a set of rules and principles that govern the conduct of Certified Public Accountants (CPAs). It is designed to ensure that CPAs maintain high standards of ethical and professional behavior in their work. The code is divided into four parts:
Key Facts
- Principles: The first part of the code outlines the overarching principles that guide the conduct of AICPA members. These principles include responsibilities, the public interest, integrity, objectivity and independence, and due care.
- Rules: The second part of the code provides specific rules that members must follow in their professional activities. These rules cover areas such as independence, integrity and objectivity, general standards, compliance with standards, accounting principles, and acts discreditable.
- Interpretations: The third part of the code includes interpretations that provide guidance on how to apply the rules in specific situations. These interpretations help members understand and navigate ethical challenges they may encounter in their professional practice.
- Ethics Rulings: The fourth part of the code consists of ethics rulings, which are official interpretations of the code issued by the AICPA Professional Ethics Executive Committee. These rulings provide guidance on how to interpret and apply the code in real-world scenarios.
Principles
The first part of the code outlines the overarching principles that guide the conduct of AICPA members. These principles include responsibilities, the public interest, integrity, objectivity and independence, and due care.
Responsibilities
CPAs have a responsibility to act in the public interest and to serve their clients with integrity, objectivity, and due care. They must also comply with all applicable laws and regulations.
The Public Interest
CPAs should act in a manner that serves the public interest and demonstrates a commitment to professionalism. This includes upholding the integrity of the profession and promoting ethical behavior.
Integrity
CPAs must maintain the highest level of integrity in their professional activities. This means being honest, truthful, and forthright in all dealings with clients, colleagues, and the public.
Objectivity and Independence
CPAs must be objective and independent in their professional judgments. This means that they must not allow their personal interests or relationships to influence their professional decisions.
Due Care
CPAs must exercise due care in the performance of their professional services. This means that they must use their skills, knowledge, and experience to provide services that meet the highest standards of quality.
Rules
The second part of the code provides specific rules that members must follow in their professional activities. These rules cover areas such as independence, integrity and objectivity, general standards, compliance with standards, accounting principles, and acts discreditable.
Independence
CPAs must be independent in fact and appearance when providing auditing and other attestation services. This means that they must not have any financial or personal relationships with their clients that could impair their objectivity.
Integrity and Objectivity
CPAs must maintain integrity and objectivity in all their professional activities. This means that they must not allow their personal interests or relationships to influence their professional judgments.
General Standards
CPAs must comply with the general standards of the profession, which include:
- Adequate technical training and proficiency
- Due professional care
- Planning and supervision
- Sufficient relevant data
Compliance with Standards
CPAs must comply with all applicable professional standards, including the AICPA Code of Professional Conduct, the Statements on Auditing Standards, and the Statements on Standards for Accounting and Review Services.
Accounting Principles
CPAs must follow generally accepted accounting principles (GAAP) in the preparation of financial statements.
Acts Discreditable
CPAs must not engage in any acts that are discreditable to the profession. This includes acts that are dishonest, fraudulent, or illegal.
Interpretations
The third part of the code includes interpretations that provide guidance on how to apply the rules in specific situations. These interpretations help members understand and navigate ethical challenges they may encounter in their professional practice.
Ethics Rulings
The fourth part of the code consists of ethics rulings, which are official interpretations of the code issued by the AICPA Professional Ethics Executive Committee. These rulings provide guidance on how to interpret and apply the code in real-world scenarios.
References:
- AICPA Code of Professional Conduct: https://www.aicpa.org/research/standards/codeofconduct.html
- Professional Responsibilities: https://www.aicpa.org/interestareas/personalfinancialplanning/resources/practicecenter/professionalresponsibilities.html
- AICPA Code of Professional Conduct – Wikipedia: https://en.wikipedia.org/wiki/AICPA_Code_of_Professional_Conduct
FAQs
What are the four parts of the AICPA Code of Professional Conduct?
The four parts of the AICPA Code of Professional Conduct are:
- Principles
- Rules
- Interpretations
- Ethics Rulings
What is the purpose of the AICPA Code of Professional Conduct?
The purpose of the AICPA Code of Professional Conduct is to ensure that CPAs maintain high standards of ethical and professional behavior in their work. It is designed to protect the public interest and to promote confidence in the accounting profession.
What are the key principles of the AICPA Code of Professional Conduct?
The key principles of the AICPA Code of Professional Conduct include responsibilities, the public interest, integrity, objectivity and independence, and due care.
What are some of the specific rules that CPAs must follow under the AICPA Code of Professional Conduct?
Some of the specific rules that CPAs must follow under the AICPA Code of Professional Conduct include:
- Maintaining independence in fact and appearance when providing auditing and other attestation services.
- Complying with generally accepted accounting principles (GAAP) in the preparation of financial statements.
- Exercising due care in the performance of their professional services.
- Avoiding any acts that are discreditable to the profession.
What are interpretations and ethics rulings under the AICPA Code of Professional Conduct?
Interpretations provide guidance on how to apply the rules in specific situations, while ethics rulings are official interpretations of the code issued by the AICPA Professional Ethics Executive Committee. Both interpretations and ethics rulings help CPAs understand and navigate ethical challenges they may encounter in their professional practice.
How does the AICPA Code of Professional Conduct help to protect the public interest?
The AICPA Code of Professional Conduct helps to protect the public interest by ensuring that CPAs maintain high standards of ethical and professional behavior. This helps to ensure that financial statements are accurate and reliable, that audits are conducted properly, and that CPAs provide competent and objective advice to their clients.
How can CPAs stay up-to-date on the AICPA Code of Professional Conduct?
CPAs can stay up-to-date on the AICPA Code of Professional Conduct by reading the AICPA’s website, attending AICPA conferences and webinars, and taking continuing education courses on ethics and professional conduct.