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How CPAs solve ethical dilemmas [Video]

How CPAs solve ethical dilemmas

Many of us grew up in households with rules that our parents insisted that we obey.

Treat your teachers with respect. Watch out for your little brother. Be home in time for dinner.

The rules were easy to understand. If you followed them, you stayed out of trouble. But what happened when the job of watching out for your little brother meant you were going to be late for dinner?

You had a decision to make, and you’d have to rely on some overarching principles to guide your actions and help you do the right thing.

This is the case with CPAs as they work to maintain their integrity and reliability. AICPA members are required to follow a Code of Professional Conduct that prescribes the proper course of action for an incredibly detailed list of situations.

Can an AICPA member accept a meal from an audit client while on an engagement? It’s in the Code.

Can a member audit a financial services client who provides a student loan to the member’s son? It’s in the Code.

But the Code can’t cover every circumstance and situation that a CPA might encounter. Fortunately, the Code also contains guidance for how to operate ethically and with integrity in these situations.

This guidance is contained in the Code’s three conceptual frameworks — one for members in public practice, one for members in business and a third for preserving independence in general. These frameworks provide members with guidance on how to proceed when the Code’s literature doesn’t provide rules, interpretations, or examples to address a specific situation.

Understand the Code’s frameworks and how they serve to protect the public interest: https://www.aicpa.org/news/article/how-cpas-solve-ethical-dilemmas

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