Ethics in the Accounting Profession: A Study

By Warth, Robert J. | The CPA Journal, October 2000 | Go to article overview

Ethics in the Accounting Profession: A Study


Warth, Robert J., The CPA Journal


CPAs' high ethical standards are the foundation for their trust in the mind of the public. In order to maintain leadership in professional ethics, a rules-oriented approach is not enough. Education and training are essential for new professionals; measurement and monitoring are crucial for maintaining standards. Compliance is merely the beginning of focused ethical leadership. To investigate how the profession is addressing these ethical challenges, the author surveyed management at several public accounting firms.

The study consisted of field visits to 17 CPA firms, from the Big Five to local firms, meeting with management-level professionals with tenure and experience that would assure valid information and opinions about firm practices. The visits were conducted in a semistructured manner, using a questionnaire designed to elicit much more than a yes/no response. (See the Sidebar for sample questions.) Participants were told that the discussions were confidential and that only summarized, non-firm-specific information would be disclosed. Questions of clarification to initial comments were used to set the tone for the appropriate level of detail desired for the meetings.

Findings

With regard to the importance of ethics in the public accounting profession, the results were unanimous. Comments such as "essential and fundamental," "hallmark of the profession," "it's why CPAs get good public opinion," "important because clients expect it," and others were common. Not one of the representatives discounted the importance of ethical behavior by CPAs.

Regarding the ethics of recruits and clients, there were some differences. Most respondents indicated little effort during recruiting, relying primarily on "judgment based on interviews," "focus on character," and "education system." However, almost all firms address the ethics of clients, both current and potential, with a formal procedure of review that includes a checklist or questionnaire, interview, and background checks. Others have a less formal, although still required, procedure. Several firms reported backing away from an exist ing client or refusing to accept a prospective client for ethical reasons.

In the area of ethics education and training, all firms except one said they rely primarily on colleges to cover the ethics and ethical behavior expected in the profession. However, none of the firms attempt to verify the coverage of such topics in the curriculum of the schools from which they recruit new hires. One firm mentioned that it has a representative on the advisory board of the college from which it does its primary recruiting which does review overall curriculum. The firms' in-house training programs do not include specific coverage of ethics topics, except for two firms (one of which indicated that the topic is included in sessions "for top-level professionals only"). Only one firm indicated the use of outside train ing programs on ethics, where warranted for certain individuals.

In only one case could a firm representative recall any discussion of ethics beyond the accounting societies' rules of conduct. Nevertheless, when asked if they ever discuss client-related ethical issues with staff, several participants indicated the common practice of referring to a client situation when discussing ethical matters with staff.

With respect to the monitoring of staff compliance with ethical standards (both the profession's and the firm's), almost all firms require an annual sign-off by staff, the content of which varies greatly among firms. Some merely ask about direct investment in clients by staff. Other sign-offs cover much more, including any disagreements encountered with clients during the year. In one firm, the managing partner reviews all correspondence with clients, looking specifically for disagreements, pressures, or other matters related to ethical issues.

Most firms reported having a plan or program that provides staff easy access to firm management to discuss any issue that makes them feel uncomfortable. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Ethics in the Accounting Profession: A Study
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.