Auditing: Professional Ethics: Lecture 5 - Professor Helen Brown Liburd (Spring 2014)

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• published: 18 Feb 2014
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Principles of Auditing: Professor Helen Brown Liburd Lecture 5 Professional Ethics February 12th, 2014 Please visit our website at http://raw.rutgers.edu TIME STAMPS 1:52 Quotes Regarding Professional Ethics 6:09 Defining an Ethical Problem 13:52 Ethical Decision Process 18:15 Ethics & Professionalism 18:44 Codes of Professional Conduct 19:35 AICPA Code of Professional Conduct 20:15 Basic Tenets of Ethical Conduct 22:43 Disciplinary Actions An ethical problem [situation] exists when an individual must make a choice among alternative actions and the right choice is not absolutely clear. An ehtical problem situation may be described as one in which the choice of alternative actions affects the well-being of other persons. The ethical decision process involves: (1) Defining all facts and circumstances. (2) Identifying stakeholders. (3). Identify stakeholders' rights and obligations in general and to each other. (4). Identify alternatives and consequences. (5) Choose the superior alternative with respect to consequences and rules. The term "ethics" refers to a system or code of conduct based on moral duties and obligations that indicate how an individual should behave in society. The term "professionalism" refers to the conduct, aims, or qualities that characterize a profession or professional person. Ethics involve the set of moral standards for right or wrong that a person, group, or a society develops. The code concerns right and wrong behavior for CPAs. AICPA Code of Professional Conduct states: (1) "Principles" are ideal standards of ethical conduct. (2) "Rules of conduct" are minimum standards of ethical conduct stated as specific rules. (3) "Interpretations" are different perspectives of the rules by the AICPA division of professional ethics. (4) "Ethical rulings" are publi9shed explanations and answers to questions about rules of conduct. The basic tenets of ethical conduct state ethics involve being responsible (exercise sensitive professional and moral judgment), public interest (honoring what is best for the people / external users), performing responsibilities with the highest sense of integrity, objectivity (impartial, unbiased, and independent, free of conflicts of interest and independent in fact and appearance), due care (diligence, competence, thorough, prompt), scope and nature of services (observe the principles when considering the scope and nature of services provided). The Professional Ethics Executive Committee (PEEC) can direct a member to take remedial or corrective actions. The AICPA Trial Board can terminate or suspend AICPA memberships. They however, cannot revoke it (only the state can).