Code of Professional Ethics and Conduct

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Each and every member of AICPA should be aware of the Interpretations, disciplinary actions and code of conduct thereby providing framework to work and provide desired results without affecting the ethical codes. This paper discusses in detail specific rules related to CPA Code of Ethics and Conduct focusing on : Section 102 – Integrity and Objectivity Section 201- Professional Competence Section 202 – Compliance with Standards Section 501 – Acts Discreditable Each section dscusses a separate cases on the expectation of code and its violation, the disciplinary action involved, prospects for AICPA to prevent breach in the above codes and personal viewpoints on disciplinary actions taken. 2. Case for Section 102 – Integrity and Objectivity (James W. Kingery of Lubbock, Texas) … Discussion The decision taken by AICPA is apt according to the disciplinary procedures as upon misrepresentation of facts and figures of a company, it is the welfare of the end consumer. i.e. the Investor which is being questioned. The investors take their major investment decisions based on the financial statements and other details provided by the company, and this being misrepresented can lead to negative results for the investor thereby leading to huge losses or even closure of funds. Simultaneously, the same situation can arise for the company as it can lead to cooking up books and creating a bubble which can burst at any given point of time creating losses for end number of institutional and retail investors. Hence, a professional CPA appointed by the company has to comply with the standards and norms and it is his responsibility to educate the management about the consequences of misrepresentation of facts, which unfortunately Mr.Kingery failed to implement. Hence, the decision taken by AICPA stands to be apt for the unethical behavior of the member. Prospects for AICPA to prevent misrepresentation of facts Create database of companies who have hired CPA’s and perform second line audit activities on a regular basis to ascertain deviations by keeping the CPA framework . A post mortem review by Apex body would be advisable thereby limiting the liability of CPA and minimize the chances of fraudulent practices to arise in the organization. (Mortimer, 2003) 3. Case for Section 201- Professional Competence (Bruno A Fedele, Jenkintown, Pennsylvania) Professional Competence is the ability to perform professional services that is based on professional standards through application of knowledge and skill with proper diligence (Mele, 2005). A CPA member is