AICPA is the professional body for certified public accountants in the country. The AICPA has a strict professional code of conduct comprising of six principles including due care, integrity, responsibility, professional independence, public interest, and scope of accounting services. Members of the AICPA are expected to adhere to the professional code of conduct that is clearly defined to avoid confusion ( Jenkins, Popova, & Sheldon, 2016) . However, the AICPA has found that members do not always adhere to the due care principle and the discovery has led to tough disciplinary actions against offenders.
Time pressure is the leading cause for the non-observance of due care principle among AICPA members. For example, in 2013 BDO an audit firm was contracted for an audit engagement by Am Trust Financial Services Inc. As the client’s date for filling the Form 10 K approached, the audit process was far from over and there were worries that it would not be completed in time (SEC, 2018). Therefore, BDO’s senior manager instructed the audit team to create false audit documentation on audit procedures that were either incomplete or had not been conducted to complete the process. BDO issued an unqualified opinion on Am trust based on misleading documents and their conduct broke many PCAOB requirements including sufficient controls and journal tests.
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Undoubtedly, the BDO broke the duty of care principle. The BDO partners did not observe ethical standards in their work; they falsified information that misled the company’s investors (SEC, 2018). Although the audit team completed the audit documentation after the release of the audit report that confirmed the previous opinion, the finding does not in any way justify their actions. Moreover, the quality of BDO work was deplorable and dishonored the accounting profession. Besides, BDO did not perform its work diligently and for the interest of its clients. When the information of the inappropriate conduct was discovered, the AICPA suspended the member who orchestrated the failed audit procedure.
Undoubtedly, the AICPA professional code of ethics plays a significant role in the protection of the accounting profession. BDO’s conduct was dishonorable and it violated the duty of care that is painstakingly made clear by the AICPA. The AICPA also leant that members experience time pressure that causes them to break the six ethical principles of the profession.
References
Jenkins, J. G., Popova, V., & Sheldon, M. D. (2016). In Support of Public or Private Interests? An Examination of Sanctions Imposed Under the AICPA Code of Professional Conduct. Journal of Business Ethics , 1-27.
SEC. (2018). In the Matter of Richard J. Bertuglia, CPA, John W. Green, CPA, and Lev Nagdimov, CPA,. Retrieved from https://www.sec.gov/litigation/admin/2018/34-84419.pdf
