Question

How is the AICPA Code different from the IFAC Code of Ethics? How are they similar?

Select one section of the AICPA code and describe the guidance provided in that section. How could an accountant use the guidance to more effectively manage his conduct as a business professional? Try to support your explanation with a relevant example.

Answer 1

Differences: In terms of differences the AICPA Code is more rule-based while IFAC Code is more principles-based. There is a difference in approach between the codes as well. The AICPA Code requires its members to use the conceptual framework approach only if the rules do not address their situation. On the other hand the IFAC Code uses the conceptual framework approach to evaluate ethical conduct throughout the code. Thirdly there is difference in terms of topics addressed. The AICPA Code provides how members in public practice may structure and name their accounting practices. The AICPA Code also mentions those “discreditable acts” that violate the Code. On the other hand the IFAC Code does not mention or name any discreditable acts.

Similarities: In terms of similarities both the codes address common areas of independence, due care, confidentiality and the truthful reporting of information. Secondly the underlying principles with regards to each code are also the same.

One section of the AICPA code that I have selected is the section titled ‘principles of professional conduct’ (0.300). This section states that members have to carry out their responsibilities as professionals and while doing so they should exercise sensitive professional and moral judgments.

For example members have a responsibility to co-operate with each other so as to improve the art of accounting. Members of different firms should not conflict with each other but rather co-operate with each other so as to not only maintain but also elevate the traditions of the profession.