Because of recent financial disasters in the news, the board of directors of your company decided that they wanted to ascertain that the organization's code of ethics was appropriate and in agreement with the Code of Professional Conduct (CPC) as adopted by the American Institute of Certified Public Accountants (AICPA). Therefore, you have been asked to provide this assurance with a report to the CFO of your organization.
Create a report including the following:
- Review the 6 principles in the AICPA's CPC.
- State what you assess to be the primary purpose of each of the 6 principles.
- Analyze the codes of conduct of at least 3 major public U.S. companies.
- Include citations for each of these companies' codes of conduct.
- Identify connections and relationships of the principles included.
- Explain how the 6 principles relate to those identified in your analysis of the codes of conduct of the 3 chosen companies.
- Prepare a recommended list of at least 7 essential elements that must be included in your organization's code of conduct based on your analysis and assessment.
A code of ethics is a set of guidelines that are designed to set-out acceptable behaviors for members of a particular group, association, or profession (Fisher, 2010). Many organizations govern themselves with such a code, especially when they handle sensitive issues like investments, healthcare, or interactions with other cultures. In this tutorial discussion would carried out on assessing the six principles in the AICPA's CPC.
Principle in AICPA's CPC
The American Institute of Certified Public Accountants (AICPA) establishes a guideline for auditors' independence, integrity and objectivity. With code of professional conduct, AICPA brings accountability, responsibility and trust to the individuals whom professional are serving (AICPA, 2012). It provides requisite guidelines and rules to the professionals. Following are six principles on which AICPA's code of profession conduct is based:
Responsibility: The principle of responsibility expresses the professional recognition of its responsibilities to the public, client and colleagues. The code of professional conduct guides the professional regarding their professional responsibilities with basic tenet of ethics. The principle exhibits commitment to honorable behavior irrespective of personal interest. The principle of responsibility has effectively helped organization to determine the accountability and cultivate a culture of responsibility among the members in the organization (Previts, Walton & Wolnizer, 2011). With the help of this principle, organization is able to ensure the improvement in accounting. This has further enhanced the culture of professionalism in the company that is important to face financial disasters.
Public interest: Public interest is yet another principle that determines the responsibility of professional towards the public. Since wide number of public such as clients, government, and investors rely on the integrity and objectivity of these professionals, it is very important to maintain effective functioning of accounting. With the help of this public interest principle, organization has successfully been enabled to keep the confidence of public (Crawford & Loyd, 2008). It has also been quite helpful in maintaining the image of the company. Apart from this, organization is also able to exhibit its commitment to the public trust that is very important under such conditions.
Integrity: In order to maintain wide public confidence, it is very important for professional to perform their responsibilities with high sense of integrity. It is the benchmark for client's confidentiality. Under integrity, the technical and ethical standards are ...
The solution discusses the accounting code of ethics.