In any profession, ethics comes down to doing the right thing, but accountants live by a higher ethical standard – one they choose to accept when they earn CPA status. Yet the ethics guidelines described in the American Institute of CPA’s 204-page Code of Professional Conduct boil down to three pages.

The code isn’t rigid with “thou shalt nots” because no document could anticipate every ethical dilemma an accountant can possibly face. Instead, the code articulates a scaffolding of six core considerations that serve as guide rails for your judgment. Learn them well, and they will serve as the touchstones for every decision you make every day. 

Accounting code of ethics

Why are CPAs held to a higher ethical standard? Because lives and livelihoods are on the line — their own, and the livelihoods of their clients. Any ethical slip-up, even unintentional or unconscious, can devastate businesses, cause financial harm and position the offending accountant to face termination, disciplinary proceedings or criminal charges.

The six principles of accounting ethics are:  

• Responsibilities 
• The public interest 
• Integrity 
• Objectivity and independence 
• Due care 
• Scope and nature of services

Of course, these qualities are innate in the vast majority of accountants. The few who intentionally skirt their ethical responsibilities usually find infamy where they thought they’d find a pot of gold. 

However, accountants start every day with a world of duties on their minds. Experts in accounting ethics point to time — or more specifically, the lack of it — as the biggest driver of ethical lapses. Cutting corners can get tasks done, but it can also cause irreparable consequences. 

Taking these six principles to heart creates the ultimate checklist for putting ethics at the forefront of every decision. As AICPA states in the code, the ethics principles “express the profession’s recognition of its responsibilities to the public, to clients and to colleagues.”

Interestingly, none are standalone items. They overlap, each principle referring to others as a source or an outcome. In sum, they weave together like flexible reeds that intertwine to create a sturdy basket. 

Accountants who internalize these six principles always have a strong moral compass that helps them navigate a sea of complexities.  

Accounting ethics No. 1: Responsibilities

The responsibilities placed on accountants differ according to their jobs, titles and duties. The responsibilities principle requires that, whatever their duties, CPAs exercise “sensitive professional and moral judgments in all their activities.”  

This one deals with professional respect and collegiality. It’s a matter of upholding the responsibilities given to you by employers and clients who use your services. That responsibility also includes cooperation among CPAs that improves the art of accounting, maintains public confidence and acts with self-governance. The collective efforts of all CPAs, the code states, are needed to “maintain and enhance the traditions of the profession.” 

Accounting ethics No. 2: The public interest

Under the public interest principle, accountants must serve the public interest, honor the public trust and commit to professionalism.  

Here’s where accountants accept the fact that the public relies on their objectivity and integrity to keep commerce functioning smoothly. Of course, “the public” encompasses many groups of stakeholders that can find themselves in conflict — outlined in the code as clients, credit grantors, governments, employers, investors, the business and financial community, and others. Accountants can face pressures from these conflicting interests, but acting with integrity means resolving the conflict in a way that fulfills their responsibility to the public which, in turn, serves the best interest of clients and employers.  

Accounting ethics No. 3: Integrity 

The integrity principle calls on accountants to maintain and broaden public confidence by performing all responsibilities with the highest sense of integrity.  

Integrity is a fundamental character of professional recognition, the quality from which public trust derives and the benchmark for testing all decisions. Are you honest and candid within the constraints of confidentiality? Are you avoiding personal gain, advantage and deceit?  

To measure integrity, consider what is right and just. When rules and standards are absent, or conflict is present, accountants measure integrity by asking, “Am I doing what a person of integrity would do? Have I retained my integrity?” It’s important to remember that decisions made with integrity uphold the form and the spirit of technical and ethical standards.  

Accounting ethics No. 4: Objectivity and independence 

According to the two-part description of the objectivity and independence principle, accountants should remain objective and free of conflict when conducting their responsibilities, and those in public practice should be independent “in fact and appearance” when providing auditing and other attestation services. 

Objectivity calls for impartiality, intellectual honesty and avoiding conflicts of interest. Independence requires steering away from relationships that could appear to impair objectivity in rendering attestation services. 

Accountants who aren’t in public practice can’t maintain the appearance of independence, but just like their colleagues in public practice, they remain responsible for staying objective and scrupulously applying generally accepted accounting principles. Candidness is in order when dealing with their colleagues in public practice. 

Accounting ethics No. 5: Due care principle

The due care principle calls on accountants to adhere to technical and ethical standards, continually strive to improve their competence and quality of services and perform to the best of their ability. 

This one’s about the quest for excellence, steeped in competence and diligence. There’s the mastery of knowledge that comes with earning the CPA and more. Competence demands a commitment to learning and professional improvement for a lifetime. It also requires a recognition of the accountant’s own limitations and a willingness to seek out consultation when needed.  

Diligence is a simple matter of professional courtesy — delivering services promptly, carefully, thoroughly, and aligned with technical and ethical standards.  Ethical professionals should constantly try to improve themselves and their profession by delivering high-quality services that satisfy the client’s needs. It is also important for accountants to keep improving in their education to keep up with the latest trends and best practices that will allow them to perform at an adequate level. 

Accounting ethics No. 6: Scope and nature of services

The scope and nature of the services principle suggest that members in public practice observe the principles to determine the extent of their services. 

In essence, this element draws on the first five principles to create a framework for deciding for or against providing services for a client or company. The code acknowledges the impossibility of creating a hard-and-fast rule, but it suggests that accountants be satisfied that they’re meeting the spirit of the principles by determining whether a firm has internal quality control procedures, whether providing an audit function would create a conflict of interest for a client, and whether, overall, the activity is consistent with their role as professionals. 

CPE points your compass toward ethics

Seen through the lens of these ethics guidelines, continuing professional education (CPE) means more than racking up credit hours. The right CPE course at the right time equips CPAs to build their storehouse of knowledge and serve clients to their highest ability. Surgent’s continuously updated CPE courses, offered as convenient webinars or self-study courses, align with pressing trends in ethics and best practices in accounting.  

A customized CPE strategy strengthens your professional status, bolstering your confidence to make ethically sound decisions. Visit the Surgent course catalog for CPE courses that fit your strategic aims, and set your moral compass with confidence in the direction of ethics.