Ethics Paper
AICPA Code of Professional Conduct
Aman Verma
2-11-2013
Phoenix University
ETH 376
Every industry has a set of rules, or code of conduct, that guides it and establishes rules to prevent professionals, as much as possible, to be ethical and true to their work. In the accounting world the AICPA, The American Institute of Certified Public Accountants, Code of Professional Conduct is considered to be the foundation of ethical reasoning in accounting. This is so because it is a code that has been established and agreed to by members of the AICPA. The key importance to this is that it’s not a regulatory body issuing rules, the Code was established and agreed to voluntarily by CPAs who are members of the AICPA. The main objectives of the AICPA 's Code of Professional Conduct states that a distinguishing mark of a profession is acceptance of its responsibility to the public. This imposes a public interest responsibility for CPAs. The public interest is defined as the collective well-being of the community of people and institutions the profession serves.
First let’s understand what may lead to unethical practices. A few situations that may lead to unethical practices would be misleading financial analysis for personal gain, misuse of funds, overstating revenue, and understating expenses, overstating the value of corporate assets or understating the existence of liabilities, sometimes with the cooperation of officials in other corporations or affiliates. There are several reasons for someone or a company to consider preforming unethical behavior, such as for self-interest—greed, an accountant may embezzle funds from his or her employer for financial gain, the Chief Financial Officer of a publicly traded corporation may prepare financial statements to appear as though the company is performing much better than it actually is, because he or she wants their stock portfolio to
Aman Verma
2-11-2013
Phoenix University
ETH 376
Every industry has a set of rules, or code of conduct, that guides it and establishes rules to prevent professionals, as much as possible, to be ethical and true to their work. In the accounting world the AICPA, The American Institute of Certified Public Accountants, Code of Professional Conduct is considered to be the foundation of ethical reasoning in accounting. This is so because it is a code that has been established and agreed to by members of the AICPA. The key importance to this is that it’s not a regulatory body issuing rules, the Code was established and agreed to voluntarily by CPAs who are members of the AICPA. The main objectives of the AICPA 's Code of Professional Conduct states that a distinguishing mark of a profession is acceptance of its responsibility to the public. This imposes a public interest responsibility for CPAs. The public interest is defined as the collective well-being of the community of people and institutions the profession serves.
First let’s understand what may lead to unethical practices. A few situations that may lead to unethical practices would be misleading financial analysis for personal gain, misuse of funds, overstating revenue, and understating expenses, overstating the value of corporate assets or understating the existence of liabilities, sometimes with the cooperation of officials in other corporations or affiliates. There are several reasons for someone or a company to consider preforming unethical behavior, such as for self-interest—greed, an accountant may embezzle funds from his or her employer for financial gain, the Chief Financial Officer of a publicly traded corporation may prepare financial statements to appear as though the company is performing much better than it actually is, because he or she wants their stock portfolio to
References: American Institute of Certified Public Accountants. (2011). Code of Professional Conduct. http://www.aicpa.org/RESEARCH/STANDARDS/CODEOFCONDUCT/Pages/default.aspx