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Office Closure: Beginning July 2, the Delap office will close for an interior remodel. The remodel project has been in the works for months and will include an updated reception area as well as new and improved conference rooms. The project is scheduled to last a few months, with the office anticipated to reopen sometime around the holidays. We will continue to assist our clients with their accounting and advisory needs during the remodel, and we appreciate your patience and understanding during this renovation process.
The nature of the work carried out by CPAs — including auditing, accounting, and tax services — requires a high level of ethics: current and potential shareholders, investors, lenders, regulatory agencies, and other users of an entity's financial statements rely heavily on those financial statements in order to make informed decisions about the entity.
From the 1980s to the present there have been numerous accounting scandals that were widely reported on by the media and resulted in fraud charges, bankruptcy protection requests, and the closure of companies and accounting firms. The insidious effect of unethical behavior by top management in major corporations has touched every American in some way, shape, or form. These stories remind us of how crucial it is that we strive for ethical decision-making and behavior in business overall, and specifically in the accounting profession.
CPAs, in particular, have significant ethical responsibilities they must meet in the day-to-day performance of their jobs. The AICPA, state boards of accountancy, state societies of CPAs, state statutes, and other regulatory agencies (such as the GAO, DOL, etc.) set forth ethical rules and regulations for their members or for CPAs who practice before them. As a result, all CPAs (not just members of the AICPA) are subject to such ethical requirements. The AICPA Code of Professional Conduct establishes the fundamental principles of professional ethics.
Due to the important role they play in society, CPAs have a significant responsibility for the services they provide. This means working to cultivate the accounting profession, cooperating with peers in the industry, and maintaining public confidence in their ability to provide professional services.
The AICPA defines the accounting profession's public as consisting of clients, credit grantors, governments, employers, investors, the business and financial community, and others who rely on the objectivity and integrity of CPAs to maintain the orderly function of commerce. Every action taken by the CPA should work towards serving the public interest.
Many times integrity is tested in the absence of clearly defined rules or expectations. The integrity of a CPA or any business person is measured by doing what is "right": it requires a CPA to observe both the form and the spirit of technical and ethical standards. In an effort to practice stringent integrity, it's important for a business person to live by the standard: do what is right, do what you think is right, do not do what you know is wrong.
Because the accounting profession provides the opportunity for financial gain stemming from client relationships, maintaining objectivity and independence is crucial. CPAs must be independent in both fact and appearance when providing auditing and other attestation services. This is achieved by applying the principles of integrity, responsibilities, and serving the public interest. But beyond this, accounting firms ensure the objectivity and independence of CPAs within their firms by requiring employees to review client lists for potential conflicts of interest and sign independence agreements, establishing quality control policies and procedures to deal with potential conflicts of interest and independence issues, and through a continual assessment of client relationships and public responsibility.
CPAs are expected and obligated to practice accounting and provide professional services to the best of their abilities. This is achieved through continuing education, seeking consultation when needed, ensuring adequate planning and supervision, performing annual performance evaluations, and cultivating experience with inter-firm mentoring relationships.
Following the guidance of the law and the AICPA Code of Professional Conduct helps pave the path for ethical behavior not only in the accounting profession but throughout the business world. One of the most effective ways we'll see ethics permeate the business world is through respected leadership, of which we can strive to achieve by setting an ethical tone starting at the top.
At Delap, we're committed to the highest level of ethics and integrity. To learn more about how we can help your company, call 503-697-4118 or reach out to us through our website.