Question

review the AICPA Code of Conduct and Sarbanes-Oxley. Review these two documents.  

What are your thoughts on these two? Write a discussion that compares and contrasts the requirements of the two documents. How do you think they are alike? Did you find any aspects in which you think they are different?

Answer 1

Solution

A) The AICPA Code of Professional Conduct is a collection of codified statements issued by the American Institute of Certified Public Accountants that outline a CPA's ethical and professional responsibilities. The code establishes standards for auditor independence, integrity and objectivity, responsibilities to clients and colleagues and acts discreditable to the accounting profession. The AICPA is responsible for drafting, revising and reissuing the code annually, on June 1.

B) The Sarbanes-Oxley Act was signed into law on 30 July 2002 by President Bush. The Act is designed to oversee the financial reporting landscape for finance professionals. Its purpose is to review legislative audit requirements and to protect investors by improving the accuracy and reliability of corporate disclosures. The act covers issues such as establishing a public company accounting oversight board, auditor independence, corporate responsibility and enhanced financial disclosure. It also significantly tightens accountability standards for directors and officers, auditors, securities analysts and legal counsel. The law is named after Senator Paul Sarbanes and Representative Michael G. Oxley.

Although they are closely linked, there are some distinct differences between the AICPA and the PCAOB. The PCAOB is an oversight board, and the AICPA is a professional member association for accountants. The PCAOB monitors accountants, while the AICPA is made up of accountants. The AICPA has created standards which guide accounting professionals and the PCAOB have adopted some of these standards to apply to public accounting firms. Also, the PCAOB specifically deals with public accounting firms and the audits of public companies while the AICPA members perform a variety of audit and attestation services for all types of companies.

Yes in the given aspect they are different-

The code establishes standards for auditor independence, integrity and objectivity, responsibilities to clients and colleagues and acts discreditable to the accounting profession.

While, sarbanes oxley purpose is to review legislative audit requirements and to protect investors by improving the accuracy and reliability of corporate disclosures. The act covers issues such as establishing a public company accounting oversight board, auditor independence, corporate responsibility and enhanced financial disclosure.