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Learning Objectives
Reflect on the meaning and importance of ethics in personal and professional life
Define a profession; differentiate from trade Understand why professionals need ethics Understand basic ethical standards in the
Code of Professional Conduct for CPAs Learn and practice a process of ethical
decision making
Ethics: What is it?
“A discipline of good and evil and moral duty.” (Funk and Wagnalls)
Actions and how they affect people
Concepts at the heart of ethics
Fairness Trust Respect Compassion Cooperation“He hath showed thee, o man, what is good, and what doth the Lord
require of thee, than to do justly, and to love mercy, and to walk humbly with thy God.” (Micah 6:8)
The Sinking of the Titanic
What were the facts? Who were the stakeholders? What were the issues and values? What were the alternatives? What actions were taken? What were the consequences?
When God Comes to Work(managing religious diversity)
Facts? Stakeholders? Issues and values? Alternatives? Actions? Check?
Ethical problem you faced today?
Facts? Stakeholders (persons involved)? Issues and values? Alternatives? Action? Did you check yourself?
Factors unique to a profession
Common body of knowledge Formal educational process Standards of entry Recognition of public responsibility Willingness to act with restraint for the
common good Adoption of Codes of Conduct
Code of Professional Conduct AICPA Professional Standards, Vol. 2 (ET) Composition
– Principles– Rules
Interpretations, Rulings
Applicability Compliance
Principles Preamble
– Requires all CPAs to assume the obligation of self-discipline above and beyond requirements of law.
– Calls for unswerving commitment to honorable behavior, regardless of personal advantage.
Article I -- Responsibilities Members should exercise sensitive
professional and moral judgments in all activities– Primary responsibility is to the “public”– Responsibility to cooperate with each other to
improve the art of accounting, maintain public confidence, and carry out self-governance.
Article II --The Public Interest Serve the public interest, honor the public
trust, commitment to professionalism. Public interest: collective well being of the
people and institutions served
Article III --Members should perform with the highest sense of integrity
The test for all decisions: “What would a person of integrity do?”
Characteristics: – Honesty– Candor– Protective of confidentiality
Article IV -- A member should maintain objectivity and be free from conflicts of interest.
A state of mind: the distinguishing feature of our profession
Impartiality, intellectual honesty, freedom from conflicts of interest.
Requires independence in attest situations.
Article V -- Due Care. A member should observe the profession’s technical and ethical standards, strive continually to improve competence and quality of service, and be duly diligent in performing services.
Continual quest for excellence, commitment to life-long learning and improvement.
Requires assessment of competence, due diligence, planning and supervision..
Article VI -- Member in public practice should observe these principles in determining scope and nature of services.
Practice in firms that have quality controls Determine whether other services might impair
audit independence. Assess whether all roles assumed are consistent
with the role of a professional accountant.