The Influence of a State Board of Public Accountancy on Ethics Education
VanZante, Neal R., Ketcham, Allen Francis, The CPA Journal
Editor's Note: In the May 2005 CPA Journal ("Improving Professional Ethics, " page 9), Neal VanZante discussed the Texas State Board of Public Accountancy (TSBPA) rules about required CPE courses in ethics. The article's conclusion referred to a new TSBPA ethics education rule for future Texas CPAs. A sidebar referred to a recent National Association of State Board of Accountancy (NASBA) exposure draft that would revise the Uniform Accountancy Act to require six credit hours of ethics courses, or its equivalent, before individuals are allowed to take the CPA examination.
Effective July 1, 2005, Texas State Board of Public Accountancy (TSBPA) Rule 511.58 requires that individuals who initially apply to take the CPA examination must have completed three semester hours of ethics education. The course must be taken at a recognized educational institution and must include ethical reasoning, integrity, objectivity, independence, and other core values. In addition, the course content and instructor must be preapproved by the TSBPA. Texas is the first state to establish such a requirement. As such, the TSBPA deserves praise for trying to emphasize ethics to potential CPAs.
TSBPA ethics rules, including Rule 511.58, serve as a strong signal that the board desires to go beyond its past interpretation of its obligation to protect the public interest. Whereas past ethics rules have focused on ensuring that CPAs were familiar with the state's Rules of Professional conduct and the penalties for failing to follow them, Rule 511.58 attempts to ensure that CPAs are, in fact, ethical individuals.
Rule 511.58 requires a stand-alone ethics course approach, in contrast to accrediting bodies' recent preference for the "ethics across the business curriculum" method, where each professor is responsible for teaching ethics in each class. That method distributes the responsibility for teaching ethics throughout the business curricula. Furthermore, business textbooks sometimes insert undemanding and even erroneous information about ethical systems, if they cover ethics at all. According to Mary A. Boose and Peter Dean ("A Proposition for Effective Integration of Ethics Across the Business Curriculum," International Business & Economics Journal, 2002), "[A]ny approach that attempts to satisfy the ethics component for accrediting bodies by distributing responsibility for teaching ethics throughout the business curricula trivializes ethics." Most business-faculty members are not trained in ethical theory and, therefore, cannot be considered prepared to teach ethics. Expecting business faculty to somehow be ethics "experts" is unfair, and akin to asking every member of the business faculty to teach political theory or categorical logic. The board's decision to go against the popular trend is praiseworthy.
In November 2002, the TSBPA amended Rule 511.58 to provide for the new ethics course requirements without seeking guidance or input directly from Texas educational institutions. The board then allowed comments for a two-month period and responded to input. Based on comments from educators (particularly those at public universities) regarding how long it takes to develop a new course, the board extended the original 2004 implementation date to 2005. At an October 2003 meeting of the Texas Society of CPAs' Relations with Educational Institutions Committee, many participants were still unaware of the new rule. Thus, on April 20, 2004, the TSBPA sent a letter to the presidents of all Texas universities explaining the ethics course requirements and the approval process. Because offering a new course requires revisions of curricula as well as approval by the TSBPA and the Texas Higher Education Board (which can take up to 18 months), many Texas universities have been forced to rush their ethics course offerings. In addition, decisions must be made quickly on whether to require an additional three credit hours for students pursuing a CPA, to eliminate another course from the accounting curriculum requirements, or to require students to use the ethics course as an elective. …