Ethics for Ohio CPAs – 3 Hours

Ohio asks for three hours of professional standards and responsibilities every three years, and this three-hour course is built to that requirement. It covers Chapter 4701 of the Ohio Revised Code — the Accountancy Board Law — together with the Accountancy Board Rules in Chapter 4701 of the Ohio Administrative Code, and the AICPA Code of Professional Conduct.

From the Revised Code the course covers advertising and the rule that a single prohibited act is sufficient to justify an injunction or conviction; the Board's public register of licensees and disciplinary history; unauthorized practice at 4701.14 — the longest section, covering which titles and abbreviations may be used by individuals, partnerships, professional associations, corporations and limited liability companies, who may sign an attest report, when a person without an Ohio permit must disclose that fact, and the practice privilege available to an individual whose principal place of business is elsewhere; employees; and the eleven grounds for discipline at 4701.16 together with the seven sanctions available, including fines up to five thousand dollars per offence, mandatory remedial CPE, and referral to a peer review committee.

From the Administrative Code it covers what constitutes the practice of public accounting as distinct from regulated services, and the requirement that a CPA whose principal place of business is in Ohio hold an Ohio permit and be affiliated with a registered firm; and the internet practice rule, which requires a firm serving Ohio clients electronically to provide, on its website home page, a means for regulators and the public to contact a responsible licensed CPA about complaints and compliance.

The accounting standards in Chapter 4701-9 are covered rule by rule: integrity and objectivity, including the conflict-of-interest provision that permits an engagement to proceed where the conflict is disclosed and consent obtained, and the clarification that disagreements over acceptable alternatives are not a subordination of judgment; the general standards of competence, due care, planning and supervision and sufficient relevant data; and the auditing, accounting principles, attestation, accounting and review services, consulting, tax services and quality control standards Ohio adopts.

The ethics standards in Chapter 4701-11 are covered in the same way: independence, which Ohio ties to SEC standards for public company audits, Government Auditing Standards for government engagements, and the AICPA Code for everything else; confidential client information; contingent fees; commissions and referral fees, with Ohio's own definitions of each; form of practice and firm names, including the categories Ohio treats as misleading and the conditions attached to “& Company”, “& Associate” and “Group”, and the network firm provisions; retention of client records, with the 45-day deadline, the detailed line Ohio draws between workpapers and client records, the rule that the Board itself decides disputed classifications, and the mediation process available; Board communications, which require a response within fifteen business days and notification of specified events within thirty days; acts discreditable, with Ohio's ten enumerated categories; and the application of the ethics rules to non-CPA owners of a firm.

The AICPA Code is then covered across all three of its parts — members in public practice, members in business, and other members — including the conceptual framework of threats and safeguards, integrity and objectivity, preparing and reporting information, responding to noncompliance with laws and regulations, independence, the general standards, compliance with standards and accounting principles rules, acts discreditable, contingent fees, commissions and referral fees, advertising, confidential client information, and form of organization and name.

Five Ohio case studies apply the rules directly: an audit client asking for a smaller bad debt adjustment to clear a loan covenant, worked through four separate Ohio rules; a fee quoted as the greater of a fixed amount or a percentage of a tax refund; a sole practitioner with no audit experience proposing to trade as Audit Experts Group; a departing audit client demanding the firm's workpapers to reduce the incoming firm's fee; and a CPA who reached 1 May without filing her own return or an extension.

Learning objectives

Upon completion of this course, participants will be able to:

1. Define ethics from an overall and professional perspective.
2. Describe the ethical rules contained in Chapter 4701 of the Ohio Administrative Code.
3. Describe the ethical standards contained in the AICPA Code of Professional Conduct.