Professional ethics

User-friendly AICPA Code of Ethics on horizon

Ethical decisions often need to be reached quickly, but the AICPA’s Code of Professional Conduct (ethics code) is not structured for quick and easy navigation. A proposed reformatted ethics code is meant to change that. AICPA members are invited to comment on the proposal until Aug. 15. The current ethics

Independence is in the eye of the beholder

The independence of CPAs is the hallmark of the profession. As such, accountants put forth significant focus and effort to comply with independence requirements related to everything from investments to business and employment relationships to services delivered to clients. But being what accountants call independent in “fact” isn’t enough. CPAs

User-friendly AICPA ethics code on horizon

Ethical decisions often need to be reached quickly, but the AICPA’s Code of Professional Conduct (ethics code) is not structured for quick and easy navigation. A proposed reformatted ethics code is meant to change that. AICPA members are invited to comment on the proposal until Aug. 15. The current ethics

Struggling European nations seen as more corrupt, report shows

In most parts of the world, perceived corruption of countries has remained the same during the past year. That’s good news in New Zealand, Denmark, and Finland, viewed in general as the most transparent. It’s more of the same for Somalia, North Korea, and Afghanistan, viewed as having the highest

Ethics / Compilation & review

Two AICPA committees extended comment deadlines to Nov. 30 on recently proposed revisions to professional standards. The proposed change to the ethics rules would require CPAs who prepare financial statements for attest clients to apply the general requirements of Interpretation No. 101-3, Nonattest Services, to maintain their independence. Proposed changes

Ethics IQ quiz

The AICPA Code of Professional Conduct (AICPA Professional Standards) is an ever-evolving document. Periodically, the JofA publishes answers from AICPA Professional Ethics Division staff to questions asked by AICPA members via the Institute’s Ethics Hotline or on topics related to revisions to the code. This set of questions and answers

Comment deadlines extended on proposed professional standard revisions

Two AICPA committees are extending comment deadlines to Nov. 30 on recently proposed revisions to professional standards. The proposed change to the ethics rules would require CPAs who prepare financial statements for attest clients to apply the general requirements of Interpretation No. 101-3, Nonattest Services, to maintain their independence. The

Proposed revisions clarify responsibilities for preparers

In accordance with recently proposed revisions to professional standards, CPAs who prepare financial statements for clients would consider that a nonattest bookkeeping service and would no longer be required to perform a compilation service with respect to those financial statements unless engaged to do so. The changes, proposed in June

Bridging the ethical divide: Survey finds firms lagging

More organizations are voicing a commitment to ethical performance, but their proclamations do not appear to be matched by action—a disconnect that is emerging as financial professionals are facing more pressure to act unethically. That ethical divide was among the key findings of Managing Responsible Business: A Global Survey on

PCAOB invites additional comments on audit firm rotation

The PCAOB is soliciting further public comment on its concept release on auditor independence and mandatory audit firm rotation in anticipation of a public meeting on the issue Thursday in San Francisco. The comment period for the concept release was reopened Monday and will be extended through July 28. The

Audit rotation debated in House subcommittee hearing

Members of Congress asked pointed questions of PCAOB Chairman James Doty on Wednesday as the hot topic of mandatory audit firm rotation was debated during a wide-ranging discussion of accounting and auditing issues in front of a House subcommittee. Rep. Scott Garrett, R-N.J., the chairman of the House Subcommittee on

PCAOB panelists say mandatory firm rotation could be harmful, helpful

Panelists voiced opposing views of mandatory audit firm rotation Wednesday during the first of two days of PCAOB hearings on the concept. Critics of mandatory rotation said it would be costly with questionable benefits, while proponents said rotation would increase auditors’ objectivity. Many panelists proposed strategies other than rotation that

PCAOB reopens comment period on audit firm rotation concept release

The PCAOB has reopened its comment period regarding a debated concept release on auditor independence and audit firm rotation. The original comment period closed Dec. 14. The new deadline is April 22, the PCAOB said Wednesday. The board extended the deadline to incorporate comments following a March 21–22 public meeting

European Commission Proposes Regulatory Changes for Audits

The European Commission today proposed sweeping regulations that would, if approved, trigger major changes in the relationships between European public companies and their auditors. The changes include: Limiting to six years the period that an outside auditing firm can perform audits for a company. A cooling-off period of four years

PCAOB Opens Discussion on Audit Firm Rotation

The PCAOB on Tuesday launched a new phase of its examination of potential limits on audit firm tenure with public companies. The board voted to issue a concept release on the topic. It plans to gather feedback by mid-December and hold a public forum on the issue in March 2012.

Improving the Code of Professional Conduct

The AICPA’s Professional Ethics Executive Committee (PEEC) is undertaking a project to recodify the Institute’s ethics standards. The Ethics Codification Project’s primary focus is to improve the AICPA Code of Professional Conduct so that members and others can apply the rules and reach correct conclusions more easily. To achieve this,

Proposed Changes to GAO's Yellow Book Promote Harmonization of Auditing Standards

In August, the Government Accountability Office (GAO) issued proposed standards revising Generally Accepted Government Auditing Standards (GAGAS), commonly known as the “Yellow Book.” The update revises the July 2007 Yellow Book and is expected to be effective for audits beginning after Dec. 15, 2011, with the exception of the financial

Ethics Story Wins Best Article Award

Martin A. Leibowitz and Alan Reinstein received the JofA’s Lawler Award for the best article of 2009. Their article, “Help for Solving CPAs’ Ethical Dilemmas” (April 2009, page 30), discussed the AICPA’s guide to help CPAs comply with rules 102–505 of its Code of Professional Conduct. Leibowitz is a faculty

Highlights of Finance and Accounting Ethics Research

Ethical behavior is difficult for any researcher to measure and analyze, especially in real-life situations. Results are often imprecise due to the challenges inherent in quantifying what is ethical and what is not. Much of the work done is theoretical, and involves either creating or applying ethics models. To draw

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How tax reform will impact individual taxpayers

Amy Wang, a CPA who is a senior technical manager for tax advocacy at the AICPA, answers to some of the most common questions on how the new tax reform law will impact individual taxpayers.