Question

Ability & Benevolence and how it applies to the AICPA Code of Conduct

Answer 1

The Integrity Principle of the AICPA Code of Professional Conduct states, “To maintain and broaden public confidence, members should perform all professional responsibilities with the highest sense of integrity.” Similar to other principles found in the code, the Integrity Principle of the AICPA Code of Professional Conduct is subject to interpretation, and could not be strictly enforced.

            On its face, the Integrity Principle of the AICPA Code of Professional Conduct seems somewhat simplistic, especially given the fact that most people assume they are acting with integrity in most situations. Despite its seemingly broad phrasing, the Integrity Principle of the AICPA Code of Professional Conduct makes the point that integrity is an essential quality for members to possess, and that it is “an element of character fundamental to professional recognition.” When members act with integrity, public trust in the profession of accounting increases.

            Generally, integrity involves an adherence to ethical principles. For members of the AICPA, integrity involves an adherence to the principles found in the code. Although it can be difficult to precisely define what integrity means, it is possible to identify behaviors that contribute to integrity. For example, the AICPA observes that honesty and candor are two behaviors which are fundamental to acting with integrity. It is also important to note that, while people who act with integrity often make mistakes or have differences of opinion, those with integrity do not act with deceit. Members who adhere to the Integrity Principle of the AICPA Code of Professional Conduct strive to act honorably in all situations, even when honorable behavior leads to an outcome which is unfavorable to the member.

            As with the other principles found in the AICPA Code of Professional Conduct, the Integrity Principle provides guidance when a member encounters a situation not specifically mentioned in the code. For example, let’s say that William Jennings is a member of the AICPA. William has a new client, Susan Brown, for whom he is providing consulting services. Susan is in the middle of a messy divorce, and provides William with details regarding her soon-to-be ex-husband. Let’s say that William also maintains a personal blog online, where he writes about his life. In writing his blog posts, William must be mindful of the Integrity Principle, even if the blog is not technically related to his accounting work. If William writes something like, “Working on divorce cases makes me glad I’m single,” he probably won’t break any laws or rules. However, this kind of statement might be interpreted as lacking integrity. Even if Susan Brown never sees the blog post, others in the public will; and their confidence in the accounting profession might be impacted by William’s seemingly innocent post. In an age where the line between personal and professional lives has become blurry, many members of the AICPA are becoming more reluctant to publish anything related to their work lives online.

[1.298.010] of the “Independence Rule” [1.200.001]

contains guidance with which a member should comply if the member identifies a breach of an

independence interpretation of the code. If a member identifies a breach of any other provision of

this code, the member should evaluate the significance of the breach and its effect on the member’s

ability to comply with the rules of the code. The member should take whatever actions may be available,

as soon as practicable, to satisfactorily address the consequences of the breach. The member should

determine whether to report the breach, for example, to those who may have been affected by the breach, a

professional body, relevant regulator, or oversight authority. In making the evaluation and in determining

what actions should be taken, the member should exercise professional judgment and take into account

whether a reasonable and informed third party, weighing the significance of the breach, the action to be

taken, and all the specific facts and circumstances available to the member at that time, would be likely

to conclude that the member is able to comply with the rules of the code. A member’s determination that

the member has satisfactorily addressed the consequences of the breach will not, however, preclude an

investigation or enforcement action concerning the underlying breach of the code and the member should

be prepared to justify such determination.