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NYSSCPA’s Ethics Committee Gives Restructured Conduct Code High Marks

Published Date:
Jul 24, 2014

The AICPA launched its revised Code of Professional Conduct on June 2, via a new online platform designed to improve its ease-of-use. The code, which the NYSSCPA voted to adopt in May 2013, governs the conduct of every State Society member.

Though the AICPA is encouraging early adoption, the revised code becomes effective on Dec. 15, to give users ample time to adapt to the change in structure.

Approved in January, the revised code is the product of a six-year-long effort by the AICPA’s Professional Ethics Executive Committee (PEEC) to make the information more accessible, so that users can “reach correct conclusions more easily,” according to the AICPA’s site. Members can view the code here.

Jack M. Carr, chair of the NYSSCPA’s Professional Ethics Committee (PEC), was enthusiastic about the new format.

“The prior code wasn’t intuitively organized,” he said. “The revised code is definitely much easier to follow. Someone who is, say, a business member and got two tickets to a show from a client can look and find [the relevant rules for handling such a scenario] in less than five minutes.”

The most significant difference between the old and the new code, according to Debbie A. Cutler, a past chair of the PEC, is mainly in how it’s organized. To make retrieving information easier, the code is now broken down into several parts by line of business: members in public practice, members in business, and other members (those seeking employment, students and retirees). Each part is then organized by topic and, where necessary, subtopic or section. 

The revised code “is intuitively arranged ... all while retaining the substance of the existing AICPA ethics standards,” said Ellen Goria, a senior manager of Independence and Special Projects for the AICPA’s Professional Ethics Division.

Moreover, though the code had previously been available as a simple PDF file, its new online platform comes with tools that allow CPAs to conduct searches (a function that had been absent in earlier incarnations) and make use of personalization features. For example, users can create notes, save and bookmark searches and email different sections. The code can also be converted to a printable, date-stamped PDF file. To gain complete access to all of the features of the revised code online, users must complete a one-time free registration, even if they are already AICPA members, Cutler said.

In terms of the revised Code, there have been comparatively few substantive changes, she added. The most significant is the addition of two conceptual frameworks for individuals in public practice and those in business (i.e., the threats and safeguards approach). In order to give members time to become familiar with the conceptual frameworks, their effective date is Dec. 15, 2015, one-year after the effective date of the revised code.

Additionally, there were substantive changes to guidance on ethical conflicts, loans and lending institutions, and blind trusts, while a new definition of attest client and expanded application in the areas of self-review threats; director positions; false, misleading or deceptive acts; billing for a subcontractor’s services; attest engagement performed with a former partner; and use of the AICPA awarded designation, were incorporated.

As it stands right now, Cutler believes that, like other codifications in recent years, the biggest initial learning curve for the revised code will be its new numbering and citation system. The old version is based on a three-digit system, with an additional dashed number in the event of an interpretation.

The new code is totally different, she said, and takes the following format: X.XXX.XXX, with the first number being either one (public accounting), two (business), or three (other), depending on the part it refers to, followed by three more digits that point to a topic within the section, and another three digits that refer to a subtopic or section. Fortunately, the revised code also includes a mapping document that allows people to reference the old number citation system in order to find their placement in the new rules.

Indeed, Carr added, the only downside to the new code is that CPAs who are used to the old version will “now have to reacquaint [themselves] with it.” However, Cutler said, the AICPA is planning training webcasts—one of which she herself attended—as part of the rollout and is developing a conceptual framework toolkit. The AICPA is also offering a video, available here, for help in understanding how to navigate the revised AICPA code.     

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