Revised AICPA Code of Professional Conduct

Headnote

Analyzing the Ethical Responsibilities for Members in Public Practice and Members in Business

On June 1, 2014, the AICPA issued a codification of the principles, rules, interpretations, and rulings in the AICPA Code of Professional Conduct that specify which ethics provisions apply to members in public practice, members in business, and other members. A major improvement of the revised code is the creation of three sections for members in different areas of practice, to assist accounting professionals in each group to determine whether they are in violation of any of the rules of conduct. The revised code also provides clearer guidance on the application of the rules to fact situations because it incorporates the ethics rules, interpretations of the rules, and ethics rulings that pertain to specific areas of the code in one place rather than having to search out the relevant pronouncements throughout the code. The revised code is effective on December 15, 2014, except for the "Conceptual Framework for Members in Public Practice" and the "Conceptual Framework for Members in Business," which become effective on December 15,2015, with early adoption permitted.

This article describes the process to be followed by CPAs in both public practice and business to evaluate whether conflicts exist that make it difficult to comply with the rules of conduct and interpretations, as well as relevant laws and regulations. It provides guidance to CPAs in determining whether ethical conflicts can be resolved through consultation with the appropriate persons in the employing organization (members in business) or the firm (members in public practice).

The revised code creates an organized structure that facilitates the application of code provisions to particular fact situations in a way that enhances awareness of ethical obligations and the steps needed to ensure compliance.

New Features

A significant improvement in the revised code is the new section on "Ethical Conflicts" that arise from obstacles to following the appropriate course of action due to internal or external pressures or conflicts in applying relevant professional standards or legal standards. The ethical conflicts provision is used in combination with the conceptual framework to determine whether specific rules of conduct have been violated. This provision is effective on December 15, 2014.

The principles in the code ("Responsibilities," the "Public Interest," "Integrity,"...