Video: Integrity and Objectivity

This lesson delves into the importance of integrity and objectivity within the AICPA Code of Professional Conduct. It emphasizes that Certified Public Accountants must uphold high standards in both their personal and professional lives, even when it comes to seemingly unrelated matters. The lesson highlights the need for objectivity and honesty, the avoidance and disclosure of conflicts of interest, and the importance of being independent in both fact and appearance. The lesson also discusses the fine line between building rapport with clients and breaching independence, reminding CPAs to avoid situations that create a conflict of interest or give the appearance of one.

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Video Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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Let's talk a little bit more about integrity and objectivity. I mentioned a little bit before, but let's dive into more detail here. We've got high standards for these. This includes both their personal and professional lives. Yes, you do need to maintain these outside of your services. Again, joking about the ice cream example. But yeah, like if you are, if you commit a crime, if you rob a store, guess what? Even though that was completely unrelated to your CPA work, you have now breached the AICPA Code of Professional Conduct and talk about consequences for that later on. TPAs must be honest and trustworthy, and they have to maintain objectivity in their work. They must avoid conflicts of interest and disclose any conflicts of interest. Follow that as well. We need to be independent in both fact and appearance. That is important because, well, you could appear independent because no one knows about the fact that maybe you have stock in the client, but in reality, in fact, you're not. It's important and then vice versa. Let's say you're actually independent, but it looks like you're not because you're schmoozing with the client, you're going out to dinner with the client too much, you're hanging out with the client on weekends. That would, now in reality, maybe you are being totally independent, but the thing is we can't read your mind. The AICPA, as much as they are an overarching organization, they can't read your mind. So that's why this fact and appearance is important. Appearance, does it look like you're independent? In fact, are you actually independent? And that's very important because that's really it, right? If you actually are independent and if you look independent, then the general populace could look at you and say,

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Ethics & Independence

Module: 3 Concepts, 42 Videos

AICPA Code of Professional Conduct Overview

1:04

AICPA Code of Professional Conduct Objectives

2:42

Introduction to AICPA Code of Professional Conduct

1:55

AICPA Requirements of Independent Auditors