Code of Ethics

Essay by billygCollege, UndergraduateF, June 2006

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I currently reside in the state of California. A code of professional ethics is a voluntary assumption of self-discipline above and beyond the requirements of the law. The purpose of this paper is to evaluate the California accounting code of ethics. "As professional, certified public accountants (CPAs) perform an essential role in society" (FITCH, 2001). The code of professional ethics for public accountants was developed by the American Institute of Public Accountant.

In the state of California, accountant client privilege is provided. The accountant is bound to keep privileged communications confidential unless the client determines otherwise. "A member in public practice shall not disclose any confidential client information without the specific consent of the client" (FITCH, 2001). Accountant client privilege allows clients to discuss riskier tax strategies directly with their accountants without seeking separate advice from tax attorneys. The foundation of public accounting is the client confidence and those people who are using financial statements produced by CPAs.

To keep the confidence of clients, CPAs shall maintain their independence and objectivity. The standards of independence require that the CPA does not subordinate his judgment on to that of the client keeping in mind that there are other CPAs who are knocking at his client's door. One of the other principles mentioned in the Code is the renunciation of promotional methods of the commercial world, which increase the pressure on CPAs and will lead to conformity with the letter of the code evading its spirit.

California's position on accounting work product is protected form disclosure if prepared by an attorney. As with the attorney client privilege, the work product protection extends only to legal advice and does not encompass information generated by or on behalf of attorneys when the attorney was principally concerned with business matters. Furthermore, even legal advice may...