Complying with the Code of Professional Conduct

in Today's Changing Environment

This course is designed to qualify for 4 hours of CPE credit that may be applied to either the General Ethics requirement or the A & A requirement. It can be reduced to a 2-hour program.

The AICPA has recently made numerous changes to the Code of Professional Conduct. The Code has been re-drafted in its entirety and is now in the form of a codification. Once understood, this format will enable CPAs to more easily navigate through the Code, identify issues that may challenge compliance with the Code, and make a determination as to whether or not a violation has occurred.

Among the changes, the AICPA introduced two new conceptual frameworks. One is designed for CPAs in public practice while the other is for CPAs in business. In the past, when an action, activity, or relationship was not specifically prohibited by the Code of Professional Conduct, it was presumed that it would not constitute a violation. The role of the new framework is to enable the CPA to make a judgment as to whether such an action, activity, or relationship creates a threat to compliance that exceeds an acceptable level. It further provides guidance as to how to evaluate existing safeguards and implement additional ones that can reduce the threat to an acceptable level.

Of particular significance are the recent changes to the independence requirements in relation to the performance of nonattest services. To clarify what a CPA may or may not do for a client without impairing independence, the Code of Conduct was amended in August 2013, modifying both the specific nonattest services that will impair a CPA's independence as well as the type of nonattest services that will do so.

Additional changes to the independence requirements are effective as of December 2014. These classify certain activities that were traditionally considered part of an attest engagement as nonattest services that are subject to the independence requirements. In addition to indicating those services that impair a CPA's independence, the CPA is required to evaluate the relationship with the client in terms of seven potential threats to independence. The CPA will identify threats and determine whether existing safeguards or additional safeguards that may be implemented will reduce the threat to an acceptable level.

This course provides a thorough understanding of the new codification of the AICPA Code of Professional Conduct. It will assist CPAs in navigating through the Code, provide guidance on applying the conceptual frameworks, and present approaches for evaluating the threats and safeguards to identify when a potential violation has occurred. This course also provides guidance on how a firm can best document its compliance with the Code to enhance the system of quality control and satisfy peer reviewers.