When discussing and evaluating professional ethics, it is essential to understand the purpose, terminology, and repercussions of professional misconduct. The American Institute of Certified Public Accountants (AICPA) code of professional conduct is the gold standard for defining professional conduct in accounting; it is therefore important for business professionals to be familiar with. In this discussion, you will explore one principle in depth and discuss it and others with your peers.
First, select one of the following principles of professional conduct to examine in the AICPA Code of Professional Conduct document:
Responsibilities
Public interest
Integrity
Objectivity and independence
Due care
Scope and nature of services
Then, for your initial post, reflect on what appropriate practice of your selected principle would look like in the field, and also on some potential examples of violations of the principle. Use the following questions to help guide your reflections:
How would you define and describe your selected principle in your own words?
What value does the principle bring to practitioners, businesses, and clients?
What is an example of a difficult situation that a practitioner may face related to your selected principle, and what would an ethical response to the situation be? Why might a practitioner be tempted to, or accidentally, not take an ethical course of action?
Full Answer Section
Here is an example of a difficult situation that a practitioner may face related to the principle of integrity:
A practitioner is auditing the financial statements of a company that is owned by a close friend. The company is struggling financially, and the practitioner knows that the friend is under a lot of pressure. The friend asks the practitioner to "look the other way" on some accounting issues that could make the financial statements look better.
The ethical response to this situation is for the practitioner to refuse to help the friend. The practitioner should explain that it is important to maintain their integrity, and that they cannot compromise their professional standards. The practitioner should also remind the friend that the financial statements must be accurate, even if the company is struggling financially.
A practitioner may be tempted to, or accidentally, not take an ethical course of action in this situation because they feel pressure from their friend. They may also be worried about losing the friend's business if they refuse to help. However, it is important for practitioners to remember that their integrity is more important than any one client or business. They must always act in an ethical manner, even when it is difficult.
Here are some other examples of violations of the principle of integrity in accounting:
- Falsifying financial statements
- Making misleading or deceptive statements to clients or auditors
- Failing to disclose conflicts of interest
- Using confidential information for personal gain
These are just a few examples of how accountants can violate the principle of integrity. It is important for all accountants to be aware of these ethical standards and to uphold them in their professional dealings.
Sample Answer
Integrity is defined by the AICPA as "the character trait that sustains one's honesty and moral uprightness." In the context of accounting, integrity means that accountants must be honest and trustworthy in all their professional dealings. They must be truthful in their representations, and they must avoid any conflicts of interest.
The value of integrity to practitioners, businesses, and clients is immense. Practitioners who are honest and trustworthy are more likely to be respected by their colleagues, clients, and the public. This can lead to increased business opportunities and a better reputation. Businesses that work with accountants who have integrity are more likely to have accurate financial information, which can help them make better decisions. Clients who trust their accountants are more likely to be satisfied with the services they receive.