One hallmark of the CPA profession is our commitment to a Code of Conduct. This Code details our responsibilities, and our CPA certificate demands compliance with it. Ethical conduct is never out of vogue in the CPA profession, and this professional code is what sets us apart from our non-certified colleagues. There is no compromise.

The Code of Conduct applies to all AICPA members whether employed in government, business and industry, public practice, or academia. CPAs in government work as preparers, auditors and consultants, and the perspective of each role is different. When faced with a work-related ethical issue, we have been taught to challenge the situation and, if it is not resolved to our satisfaction (in the context of GAAP), we should resign. In establishing the Code of Conduct, the implications of resignation for a member in government is not taken lightly; the fact that an employer is the member’s only source of income, possibly the only source of health insurance for themselves and their family, is recognized. However, in situations where all efforts at resolution and GAAP compliance have been explored yet the situation is still not adequately resolved, then resignation is the only alternative—this is what we must do to comply with the high ethical standards of the CPA profession.

If you are challenged with an ethics issue at some point in your professional career, chances are you don’t know where to turn, whom to talk to, or what to do next. The AICPA, in consultation with the Government Performance and Accountability Committee (GPAC), created the following decision tree to help walk you through a process of resolving an ethics issue that you might encounter. GPAC members, who are CPAs at federal, state and local governments and related agencies, contributed their experience in finalizing this decision tree. From their perspective, we offer the following points for you to think about:

• Do your best to resolve the issue within your own organization, whether that is your department in a larger organization or within the government as a whole. Most issues are easily resolved.
• Be cognizant of your obligations to your organization’s auditor or oversight body. You must be candid and must not knowingly misrepresent facts or fail to disclose material information to them (Ethics Interpretation 102-3). The full text of the interpretation is provided on the fourth page of this document for your convenience.
• A common ethics violation by CPAs not in public practice relates to Ethics Interpretation 102-4 on “Subordination of Judgment.” This happens when a CPA is pressured by someone to violate GAAP; that is, the CPA allows himself or herself to be induced to do something they know (or should know) is not correct. A defense that another person induced the CPA to violate standards is not acceptable. The full text of the interpretation is provided on the fourth page of this document for your convenience.
• Don’t overlook an ethics policy or statement in place in your organization. In some governments or agencies you might need to rely on outside resources as ethics policies might not be fully developed or documented.
• Maintain professional skepticism. If you get an explanation for the situation, think about whether it makes sense. Continue to observe over time to see if the situation plays out as expected.
• Maintain documentation of the issue—your thoughts and decisions all along the way, and the parties with whom you discussed these issues—to review later as may be necessary.
• Even if you are successful in a particular situation, you might find that there are other implications that make it impossible to continue working at this government or agency. In this situation you should seek employment elsewhere.
• Depending on the severity of the issue, you may want to consult with people whom you respect from outside the organization. Also, consider whether you need to consult with an attorney.

Our hope for you is that you never need to use this decision tree. However, if you do, we hope you find it helpful. Share your comments with us at: gpacnews@aicpa.org