As in most professions, CPAs can run into ethical dilemmas on a regular basis. However for CPAs, the process for handling the ethical dilemma and the outcome must follow specific guidelines as established by the CPA profession and its regulatory agencies.
The AICPA has a Code of Professional Conduct its members, and most other licensed CPAs, must follow. How a CPA manages ethics in accounting is often dictated by these guidelines, although it is obviously up to the individual CPA to implement the proper method.
On Leading With a Code of Ethics
CPA firms and other businesses often have their own code of ethics or conduct as well, either for their entire staff or specifically for CPAs.
These ethics and conduct rules guarantee all CPAs and employees act in an exceedingly consistent manner.
Whether your firm does or doesn’t have their own specific set of ethics and conduct, be sure you’re following the necessary professional standards and review your actions to make sure you’re following commonly accepted principles.
CPAs have the unique responsibility to provide their clients and the public with the security of knowing their advice carries the basic tenants of the CPA profession: integrity, objectivity and independence. Each of these qualities ensures the CPA operates on a higher level and is able to provide the necessary advice that removes them from the situation.
On Leading With Integrity
Integrity is a vital basic part of the CPA profession
Integrity requires CPAs to be honest, candid and forthright with a client and how their financial situation is presented. In order to ensure integrity, CPAs should prohibit themselves from personal gain or advantage using confidential data, such as insider trading.
While there may exist variations in opinion to how an accounting standard is applied, a skilled CPA can avoid being the victim of an unethical decision by following the proper guidance.
For example, any intentional deception or manipulation of financial statements is not ethical.
What is every leadership position had this standard?
On Leading With Objectivity and Independence
Objectivity and independence are also vital moral values within the CPA profession
CPAs should stay free from conflicts of interest and questionable business relationships when providing CPA services. Failure to stay objective could hinder a CPA’s ability to supply an honest opinion. The CPA profession usually limits the types of services a CPA firm or individual CPA can provide so they do not conflict.
Accounting services embody general accounting, auditing, tax and management advisory services. CPAs who perform any of these services for a client could be compromising their objectivity and independence if they also perform other conflicting services.
For example, a CPA cannot perform accounting services and audit services as it would involve them auditing their own work.
As such, CPAs need to be independent in their services.
On Leading Like a CPA
No matter your profession, if you do run into an ethical dilemma, be sure to consult the ethical standards that apply. If you have a mentor they may also be able to advise you.
Ultimately, the decision on how to handle the ethical dilemma is yours.
If you chose to be swayed by the prospects of hiding accounting errors or using your inside knowledge to gain monetary rewards, and you are caught, you will be subject to fines, loss of your license and even jail time.
The consequences of failing to abide by your ethical standards are much worse than the work it may take to follow them.
Never miss an issue of Linked 2 Leadership, subscribe today.
Learn, Grow & Develop Other Leaders™
Image Sources: geemiz.com