Open AccessStatewide Adoption of the AICPA Code of Professional Conduct: A Review of Recent AICPA Disciplinary Actions
Author(s) -
Devon Baranek,
Ethan Kinory
Publication year - 2020
Publication title -
accounting and finance research
Language(s) - English
Resource type - Journals
eISSN - 1927-5994
pISSN - 1927-5986
DOI - 10.5430/afr.v9n1p16
Subject(s) - discipline , enforcement , sample (material) , professional conduct , code (set theory) , code of conduct , state (computer science) , business , political science , public relations , accounting , computer science , law , chemistry , set (abstract data type) , chromatography , algorithm , programming language
This study reviews the AICPA disciplinary process and examines a recent sample of disciplinary actions taken against practitioners for ethics violations. Trends related to enforcement and disclosure of actions are inspected and additional details are provided based on state codes of conduct. We consider the effects of uniform statewide adoption of the AICPA Code of Professional Conduct for CPAs, as recently encouraged by the AICPA and NASBA. We find 43% of state accounting boards have formally adopted the AICPA Code of Professional Conduct, 35% have not adopted the Code and 22% have partially adopted the Code. The three states with the highest number of disciplinary actions are New York, California and Texas, none of which have adopted the Code. Of the top ten states with the greatest number of enforcement actions, only two have formally adopted the Code. The most common type of investigation in the sample is an automatic disciplinary provision by the AICPA. Dispositions for violations appear to be getting more severe, with admonishments declining and settlements, terminations and suspensions taking its place.