...Ethics – can we merge AICPA and IFAC ethics standards? AC504 March 10, 2013 INTRODUCTION There are many challenges and obstacles facing the accounting profession with the convergence towards a globally accepted accounting reporting structure and a global ethics structure. Today’s economy is becoming globally smaller and more importantly the economy from all fronts is becoming more co-dependent on one another from a domestic and international perspective regarding finance, raw materials, IT, and labor talent. Some of the challenges facing the accounting profession as move towards a global standard is how do we ensure the information are reliable? Many companies in various parts of the world have different reasons/motives for how financial information is compiled and distributed due to things such as government or other political/social reasons and influences. Another large issue facing accountants would be what is acceptable in Country A may be unacceptable from an ethical standpoint to Country B. An example of this, IGAAP is less stringent than U.S. GAAP regarding certain disclosures, therefore, how will the information be disclosed in order for investors and creditors to make informed decisions. From an ethical standpoint will companies chose to use IGAAP because it is less stringent and the disclosure will be less disclosed than it is today. Finally the idea of enforceability, in certain countries, will the Commission actually have authority to hold...
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...Because of the expansion of commerce worldwide by many businesses, other issues have arose in this process, such as the need for common global regulation of banks and a need for a global set of ethical standards. In the 1970s, the Foreign Corrupt Practices Act (FPCA) sent a chill throughout the business community by criminalizing the act of making payments outside the US in pursuit of contracts (George, 2008). Making payments to obtain business is common practice in many developing markets and some companies feel that they need to “play the game” in order to compete. The fact that many US executives lobbied to relax these provisions, arguing that they were at a competitive disadvantage in bidding against non-US companies, has increased the ethics debate, in particular the need for a set of ethical policies that can adapt to the local...
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...practices, given pressing economic, social, and environmental problems on a global scale. By conducting business in ways that promote ecological health and human welfare, corporations increase value over the long term for consumers, shareholders and others for both current and future generations. Business students need to be familiar with, and committed to, principles and practices of corporate sustainability. This short essay outlines several sources in the literature on corporate sustainability provided by the following organizations: International Organization for Standardization (ISO); Price Waterhouse Coopers (PWC); Federal Reserve Bank of St. Louis; International Federation of Accountants (IFAC); Ernst & Young; and Association of Certified Public Accountants (AICPA). An annotated bibliography follows the discussion, highlighting articles of interest in corporate sustainability literature. Finally, figures provided in an appendix illustrate key concepts from the discussion. ISO 26000:2010 International Organization for Standardization * Headquartered in Geneva, Switzerland. A global consortium of experts in multiple aspects of quality-related standardization representing industry, nonprofits, government, healthcare, and academia. * Formulated by technical committees, standards are released after extensive review and a minimum 75% favorable vote by ISO members drawn from 160-plus nations. Meeting since ISO's founding in 1947, members formulate...
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...Ethics is more than simply the pursuit of goods; is also about fidelity to ethically acceptable relationships. A crucial relationship is that of a professional towards his or her client. Because accounting is a skill that demands expertise, and because accountants have clients’ who depend on that expertise, accounting can be included among the professions. Accounting ethics in the field of accounting refers to the guidelines (consisting of judgments and moral values) that a professional needs to follow while practicing accounting. People using the service of accounting professionals rely on their professional competency to take decisions and in the process also relies on the ethics followed by them. Roles an Accountant can fulfill Although accountant’s primary purpose is to present a picture of an organization’s financial affairs, accountants play many other roles: 1) Auditing- the most important role is the role of an independent accountant (auditor). The auditors function is that the organizations estimate are based on formulas and those formulas are applied consistently year to year- thus to ensure reasonable and consistent application. 2) Managerial Accounting- In house role of accountant is to give most accurate picture of the organizations economic state so that company can flourish. The account’s main responsibility is to the company, but if the companies’ board, managers and share-holders are at cross purpose, the accountant is conflicted. This conflict forms the ground...
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...CONTENT AND SKILL SPECIFICATIONS FOR THE UNIFORM CPA EXAMINATION Approved by the Board of Examiners American Institute of Certified Public Accountants May 15, 2009 Effective Date: January 1, 2011 Board of Examiners Examinations Team American Institute of Certified Public Accountants Parkway Corporate Center 1230 Parkway Avenue, Suite 311 Ewing, NJ 08628-3018 COPYRIGHT © 2009 BY AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS, INC. CONTENT SPECIFICATION OUTLINES (CSOs) The outline portions of the content specifications identify the extent of the technical content to be tested on each of the four sections of the Uniform CPA Examination. The outlines list the areas, groups, and topics to be tested in the following manner: I. (Roman numeral) Area A. (Capital letter) Group 1. (Arabic numeral) Topic Each outline is followed by information about selected publications that candidates may study to prepare for the Uniform CPA Examination. Weights The percentage range following each area represents the approximate percentage of total test questions associated with the area. The ranges are designed to provide flexibility in building the examination, and the midpoints of the ranges for all areas in each section total 100%. The examination questions will be selected from each area to fall within the percentage allocation range. No percentages are given for groups or topics. The presence of several groups within an area or several topics within a group does not imply equal...
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...the Sarbanes-Oxley Act of 2002 (SOX), a new era of stakeholder expectations was crystallized for the business world and particularly for the professional accountants that serve in it. The drift away from the professional accountant’s role as a fiduciary to that of a businessperson was called into question and reversed. The principles that the new expectations spawned and renewed resulted in changes in how the professional accountants are to behave, what services are to be offered, and what performance standards are to be met. These standards have been embedded in a new governance structure and in guidance mechanisms, which have domestic and international components. The influence of the International Accounting Standards Board (IASB) and the International Federation of Accountants (IFAC) will be as important as that of SOX in the long run. This chapter examines each of these developments and provides insights into important areas of current and future practice. Building upon the understanding of the new stakeholder accountability framework facing clients and employers developed in earlier chapters, this chapter explores public expectations for the role of the professional accountant and the principles that should be observed in discharging that role. This leads to consideration of the implications for services to be offered, and of the key “value added” or competitive edge that accountants should focus their attention on to maintain their reputation and vitality. Sources of ethical...
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...Accounting ethics is primarily a field of applied ethics and is part ofbusiness ethics and human ethics, the study of moral values and judgments as they apply to accountancy. It is an example of professional ethics. Accounting introduced by Luca Pacioli, and later expanded by government groups, professional organizations, and independent companies. Ethics are taught in accounting courses at higher education institutions as well as by companies training accountants and auditors. Due to the diverse range of accounting services and recent corporate collapses, attention has been drawn to ethical standards accepted within the accounting profession.[2] These collapses have resulted in a widespread disregard for the reputation of the accounting profession.[3] To combat the criticism and prevent fraudulent accounting, various accounting organizations and governments have developed regulations and remedies for improved ethics among the accounting profession. ------------------------------------------------- Importance of ethics The nature of the work carried out by accountants and auditors requires a high level of ethics. Shareholders, potential shareholders, and other users of the financial statements rely heavily on the yearly financial statements of a company as they can use this information to make an informed decision about investment.[4] They rely on the opinion of the accountants who prepared the statements, as well as the auditors that verified it, to present a true and fair...
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...internationally comparable financial information. That’s why in 1999, CGA-Canada took the pioneering step of advocating for the convergence to IFRS in Canada and continues today to contribute to the evolution and adoption of IFRS. By providing our professional advice to the accounting community, ensuring the latest information and professional development opportunities are available to CGAs and keeping the CGA Program of Professional Studies current, the Association is well prepared for the transition to IFRS. CGA-Canada and International Standards-Setting CGA-Canada plays a critical role in international standards-setting through exposure draft comments and its international representation by virtue of being an International Federation of Accountants (IFAC) member body. Comments to the International Accounting Standards Board, the International Auditing and Assurance Standards Board, the International Ethics Standards Board for Accountants and the International Accounting Education Standards Board, among others, are provided on draft standards and emerging issues. And the Association, through its international delegates participates in several international accounting bodies, such as the International Federation of Accountants and the International Accounting Standards Board. CGAs and IFRS Resources Through mandatory continuing professional development (CPD), members...
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...Chapter 1 Ethical Reasoning: Implications for Accounting Ethics Reflection PENN STATE CHILD ABUSE SCANDAL: A CULTURE OF INDIFFERENCE What motivates an otherwise ethical person to do the wrong thing when faced with an ethical dilemma? Why did Joe Paterno and administrators at Penn State University look the other way and fail to act on irrefutable evidence that former assistant football coach Jerry Sandusky had raped and molested young boys, an offense for which Sandusky currently is serving a 30- to 60-year sentence? According to the independent report by Louis Freeh that investigated the sexual abuse, four of the most powerful people at Penn State, including president Graham Spanier, athletic director Timothy Curley, senior vice president Gary Schultz, and head football coach Joe Paterno, sheltered a child predator harming children for over a decade by concealing Sandusky’s activities from the board of trustees, the university community, and authorities. The Freeh report characterizes the inactions as lacking empathy for the victims by failing to inquire as to their safety and wellbeing. Not only that, but they exposed the first abused child to additional harm by alerting Sandusky, who was the only one who knew the child’s identity, of what assistant coach Mike McQueary saw in the shower on the night of February 9, 2001.1 McQueary testified at the June 2012 trial of Sandusky that when he was a graduate assistant, he walked into the locker room and heard sounds of slapping...
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...International Financial Reporting Standards (IFRS) An AICPA Backgrounder 1 Table of Contents Get Ready for IFRS ........................................................................................ 2 Worldwide Momentum ................................................................................. 2 SEC Leadership in International Effort .......................................................... 3 The SEC Work Plan........................................................................................ 4 FASB and IASB Convergence Efforts............................................................. 5 AICPA Participation ....................................................................................... 7 Two Sides of the Story ................................................................................... 7 Differences Remain Between U.S. GAAP and IFRS ....................................... 8 What CPAs Need To Know ............................................................................ 8 Appendix ..................................................................................................... 10 Organizations Involved ................................................................................ 12 1 Get Ready for IFRS The growing acceptance of International Financial Reporting Standards (IFRS) as a basis for U.S. financial reporting represents a fundamental change for the U.S. accounting profession. The number of countries that require...
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...The Emerald Research Register for this journal is available at www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at www.emeraldinsight.com/0268-6902.htm The changing role of the auditors R. Jayalakshmy, A. Seetharaman and Tan Wei Khong Faculty of Management, Multimedia University, Cyber Jaya, Malaysia Abstract Purpose – To highlight the pressures that the auditors would face in the era of globalisation and the challenges they should be willing to accept in order to maintain trust and integrity. Design/methodology/approach – A wide range of articles and journals published in international journals as well as local journals has been reviewed. The areas covered include audit fraud, true and fair view interpretation, auditor independence and role of internal auditors. Further, ideas have also been obtained from critical write-ups in the business magazines on the fall of multinationals. Findings – A wide range of interpretation has been given by various groups of people on their understanding of the phrase “true and fair”. This has created great confusion as to the interpretation of the audit reports. This has been proven by the fall of many multinationals and the audit pioneers, Andersens. This is one of the causes of audit fraud and it is also seen that as the auditors face an enormous challenge as they enter the twenty-first century, they should be willing to change their attitudes towards their clients. Professionalism...
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...TABLE OF CONTENT 1.0 Introduction | | 2.0 Issues Surrounding the Professionalism of Accounting | | 3.0 Literature Review | | 4.0 Presentation of the main Idea about the Professionalism of Accounting | | 5.0 Analysis and discussion | | 6.0 Conclusion | | 7.0 Reference | | 1.0 INTRODUCTION 2.0 ISSUES SURROUNDING THE PROFESSIONALISM OF ACCOUNTING Twenty years ago, Briloff (1986) alerted the profession to the crisis of credibility being faced because society perceived accountants to have lost their commitment to public service. The credibility of the profession is threatened when the ideals of integrity, independence, public service and ethical standards come under suspicion. Well-known scandals of one of the major leading accounting firms in the United States Arthur Andersen coupled with alleged unethical acts committed by Enron have arouse the conscious of the public and stakeholders as to the moral decline and unethical posture of public accountants unveiled a decline in moral reasoning and ethical standards of public accountants (Dellaportas, 2006; Esmond-Kiger, 2004). Over the last few years, the accounting profession has been beaten up badly in the media, somewhat justifiably. The forces at work were numerous and complex and a variety of phenomena created the entire profession had its reputation tarnished. Some forces were not new: delivering services that acted to impair independence; becoming too cozy with clients, active participation...
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...CHAPTER 1 AN INTRODUCTION TO ASSURANCE AND FINANCIAL STATEMENT AUDITING Answers to Review Questions 1-1 The study of auditing is more conceptual in nature compared to other accounting courses. Rather than focusing on learning the rules, techniques, and computations required to prepare financial statements, auditing emphasizes learning a framework of analytical and logical skills to evaluate the relevance and reliability of the systems and processes responsible for financial information, as well as the information itself. To be successful, students must learn the framework and then learn to use logic and common sense in applying auditing concepts to various circumstances and situations. Understanding auditing can improve the decision making ability of consultants, business managers, and accountants by providing a framework for evaluating the usefulness and reliability of information. 1-2 There is a demand for auditing in a free-market economy because the agency relationship between an absentee owner and a manager produces a natural conflict of interest due to the information asymmetry that exists between the owner and manager. As a result, the agent agrees to be monitored as part of his/her employment contract. Auditing appears to be a cost-effective form of monitoring. The empirical evidence suggests auditing was demanded prior to government regulation such as statutory audit requirements. Additionally, many private companies and other entities not subject...
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...Auditor Independence and Non-Audit Services: A Literature Review Vivien Beattie University of Stirling and Stella Fearnley University of Portsmouth TABLE OF CONTENTS Page List of tables and list of figures About the authors v vi List of abbreviations vii Executive summary ix Part 1 Auditor independence 1 Introduction 1 1.1 1 1.2 The ‘problem’ of non-audit services (NAS) 1 1.3 The current UK regulatory and professional environment 2 1.4 Motivation for this study 3 1.5 2 The role of audit in regulating capital markets Structure of report 3 Auditor independence 4 2.1 Introduction 4 2.2 Definitions of auditor independence 4 2.3 Economic models of auditor independence not including NAS 5 2.4 Models of auditor pricing and independence in the presence of NAS 5 2.5 2.6 Economic power models of auditor independence Moral psychology, ethical reasoning and independence 8 8 2.7 Broader based studies into auditor decision making 9 2.8 Summary and comments 11 Part 2 Current regulatory frameworks 3 Auditor independence and NAS: analysis of current regulatory frameworks 3.1 Introduction 13 13 3.2 Regulation of auditor independence 13 3.3 Independence in professional and legal regulatory frameworks 13 3.4 3.5 Independence and NAS Overall economic dependence 19 22 3.6 Small companies 22 ...
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...Nigerian Stock Exchange. They were systematically and purposively selected from the number of quoted companies in the exchange. A five point scale questionnaire was used with items on ethical issues on organizational financial reporting and performance. Data was analyzed using descriptive statistical tools and Spearman Rank Order Correlation Coefficient. Findings suggest that the compliance by the accountant positively and significantly affect the quality of financial reports and performance of organizations. The conclusion drawn from the findings is that the compliance by the accountant on professional ethics of integrity, objectivity, honesty, compliance and accountability will improve the quality of financial reports and the performance of organizations. Based on the findings, some recommendations were made, among which are that organizations should establish a position for ethics officers in Nigerian organizations; creation of non-threatening environment for the discussion of ethical problems and co-operation...
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