1. Whom does the Code of Professional Conduct govern? Bylaw section 230 explains that the Code applies to all individuals that are members of the American Institute of Certified Public Accountants. In addition, certain state CPA societies and state boards of accountancy have incorporated all, or parts, of the Code into their own rules of conduct.
2. Can the AICPA revoke my license due to a disciplinary matter? No. The AICPA cannot revoke a member's license, only the applicable state licensing board can. However, according to Bylaw section 700, the AICPA can terminate or suspend an individual's membership.
3. Does the AICPA contact other state CPA societies and regulatory agencies having disciplinary responsibilities? The AICPA and 49 state CPA societies have joined together to create the Joint Ethics Enforcement Program (JEEP) in order to permit joint enforcement of their respective codes of professional conduct with respect to a member by means of a single investigation. Accordingly, investigative information is shared between the AICPA and the state CPA societies. In certain cases, the AICPA will report its findings to the federal and/or state regulatory agencies, including state boards that have jurisdiction over the matter.
4. Do other state CPA societies and federal and/or state regulatory agencies refer matters to the AICPA? The bylaws of most state societies include similar powers by incorporating the Joint Ethics Enforcement Programs (JEEP) agreements. In addition, the AICPA Professional Ethics Division monitors the disciplinary actions of various state licensing boards, as well as receives referrals from federal agencies such as the Securities and Exchange Commission and various Inspectors General.
5. Am I subject to the Code if I practice public accounting or work in business and industry? Yes. All AICPA members regardless of whether they practice public accounting or are in business and industry are subject to the AICPA’s Code of Professional Conduct. The bylaws of most state societies include similar powers by incorporating the Joint Ethics Enforcement Programs (JEEP) agreements. Accordingly, members of many state societies are also subject to the provisions of the Code.
6. Can I discuss the content of the CPA exam I recently sat for? According to the "Solicitation or Disclosure of CPA Examination Questions and Answer" interpretation (ET sec. 1.400.020) of the Code, a member cannot solicit or knowingly disclose the CPA examination questions and/or answers without written authorization from the AICPA.
7. Am I required to file a timely tax return? According to the "Failure to File a Tax Return or Pay a Tax Liability" interpretation (ET sec. 1.400.030) of the Code, members who fail to file their personal tax returns, those of their firm, or remit their payroll or other taxes collected on behalf of others on a timely basis, including extensions, may be considered to have committed an act discreditable to the profession.
8. What provides the AICPA the power to enforce the Code of Professional Conduct? Enforceability of the Code is contained in the AICPA Bylaws sections 360 and 700.
9. How could I have a conflict of interest when I am no longer working in public accounting? While the question of independence is assumed to be automatically impaired by virtue of an employment arrangement, the concept of objectivity becomes even more important. According to the "Conflicts of Interest for Members in Business" interpretation (ET sec. 2.110.010) of the Code, a conflict of interest creates adverse interest and self-interest threats to a member's compliance with the "Integrity and Objectivity Rule". The interpretation provides examples of how threats are created as well as examples of situations where conflicts of interest may arise. The interpretation goes on to provide guidance on how to identify and evaluate a conflict as well as explaining the disclosure and consent requirements.
10. What are the ramifications if I am found in violation of the Code? Depending on the degree of significance of the violation(s) of the Code, the member may be subject to a wide range of remedial and/or disciplinary sanctions that may include continuing professional education (CPE), additional monitoring by the Professional Ethics Division and publication of the member’s name in the Wall Street Journal and/or other periodicals of the AICPA and state societies. Furthermore, membership rights could be affected, resulting in suspension or expulsion from the AICPA and/or state societies.
11. What established accounting principles must I follow and what is enforceable under the Code of Professional Conduct? Members must adhere to generally accepted accounting principles in their performance of professional services regardless of how a member practices in the profession. The "Accounting Principles Rule" (ET sec. 2.320.001) of the Code has delineated the standard setting bodies allowed to promulgate generally accepted accounting principles.Legal Disclaimer - All persons, and entities, in situations depicted are fictitious and any resemblance to any person living or dead or to any actual entity or situation is purely coincidental. This content is designed to provide illustrative information with respect to the subject matter covered. It does not establish standards or preferred practices. The material was prepared by AICPA staff and has not been considered or acted upon by senior technical committees or the AICPA Board of Directors and does not represent an official opinion or position of the AICPA. It is provided with the understanding that the author and publisher are not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. The author and publisher make no representations, warranties or guarantees as to, and assume no responsibility for, the content or application of the material contained herein, and expressly disclaim all liability for any damages arising out of the use of, reference to, or reliance on such material. Copyright © 2002 by the American Institute of Certified Public Accountants, Inc. License is hereby granted for reuse or reprint of this matter for purposes other than resale or commercial exploitation, provided AICPA copyright statement and acknowledgment of any modification is displayed in any circumstance of reuse or reprint.