Decoding the Gray Areas
Suppose you are the owner of a convenience store. You purchase newspapers at a fair wholesale price from a man named Harry. Each morning Harry delivers a stack of newspapers to your shop by 6:30 a.m., prior to the morning rush.
At 6:00 a.m. one morning you are walking in your neighborhood and see Harry taking a stack of newspapers from a corner. Harry places the papers in his backpack and continues on his way.
Soon after, Harry arrives at your shop to make his usual delivery. Should you continue your business with him now that you have observed him taking those newspapers?
However, ethical dilemmas are not always so clear. Let’s go back to the newspaper scenario. What if you learn that in addition to taking newspapers, Harry works three jobs to save his family of three kids from poverty. Does this additional information change your view? Are Harry’s actions now justified?
When we encounter a dilemma regarding the right vs. wrong thing to do in our personal lives, we use our morals to come to a conclusion. In our professional lives as CPAs, in addition to using our own ethical and moral compass we can turn to the AICPA’s Code of Professional Conduct to guide us. A newly revised version of the Code is now available and is effective as of Dec. 15, 2014, with early implementation encouraged. The reformatted Code is broken down into different parts by line of practice and is organized by topic and, where appropriate, subtopic and section. Additionally, the updated Code incorporates two conceptual frameworks, one for members in public practice and one for members in business, to help address ethical dilemmas not covered in the Code. These two conceptual frameworks are effective Dec. 15, 2015, with early implementation also encouraged.
We encourage you to begin exploring the Code on its new online platform. Information on the Ethics Codification project can be found in the recent Journal of Accountancy article, and additional resources, including implementation tools, are available for your use on the Ethics Codification project page. To help us spread the word on this exciting project, please share the recently released infographic illustrating the changes to the Code of Professional Conduct.
What do you think of the changes to the Code? Have you run into ethical dilemmas with your practice or clients?
Ellen Goria, CPA, CGMA, Senior Manager, Independence & Special Projects, Professional Ethics Division, American Institute of CPAs. Ellen staffs various task forces that develop independence and behavioral guidance. She assists with interpreting the AICPA’s Code of Professional Conduct by providing guidance to members, state CPA societies and other interested parties on ethics and independence issues.
Ethics image via Shutterstock