Ethics for Colorado CPAs – 4 Hours

Colorado is one of the states that asks for more than a generic ethics course. Of the four CPE hours awarded here, two are Colorado Rules and Regulations — the CR&R component that Colorado licensees need, and that a newly certified CPA must complete within six months either side of the date the Board grants an initial certificate.

The Colorado half of the course works through the Act at Title 12, Article 2 of the Colorado Revised Statutes and the Board’s own Rules at Chapter 3 of the Code of Colorado Regulations, Section 705-1. It covers the makeup and powers of the State Board of Accountancy; the Rules of Professional Conduct on integrity, objectivity, independence, due care and competence; the solicitation rule; client privilege, client records and the five-year retention obligation, including the requirement to furnish a copy of a report or return within a timely period even where fees remain unpaid; commissions, referral fees and contingent fees, and the written disclosure that must precede them; and the rule against acting through others.

It also covers the parts of Colorado practice that most often catch licensees out: the four certificate statuses — active, inactive, retired and expired — and what each permits; the requirement to append the issuing state, or the word “Inactive” or “Retired”, when using the CPA designation; the continuing education split, in which no more than twenty per cent may be Personal Development and four hours must be Ethics; the information a licensee must display when offering services over the internet, including the Colorado certificate number; mobility, practice privilege and reciprocity; peer review, its exemptions and the eighteen-month completion deadline; and the reporting obligations that follow discipline elsewhere, a criminal charge, or a negligence settlement above the stated threshold.

The remaining two hours put those rules in context. Part I sets out the ethical frameworks that underpin professional judgment — consequentialism, deontology and virtue ethics — and shows how a CPA’s conclusion can shift depending on which lens is applied. Part II reads the Colorado Rules alongside the AICPA Code of Professional Conduct, which the Board adopts by reference, noting that where the two differ the Colorado Rule governs. Part III closes with putting ethics into action: the rationalizations that precede misconduct, and the warning signs of an organization on the verge of ethical collapse.

The material is taught through case studies drawn from real events — among them WorldCom, HealthSouth, the fraud at Buca Inc., Toronto-Dominion Bank’s decision to exit the structured products market before the crisis, and the embezzlement at Collin Street Bakery — so that the rules arrive attached to consequences rather than in the abstract.

Learning objectives

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

1. Identify the ethical framework that applies to professional accounting as a CPA, and apply it to situations encountered in practice.
2. Recognize the intent behind the AICPA Code of Professional Conduct and the Colorado Rules and Regulations in the performance of professional accounting services, as distinct from mere technical compliance with those rules.
3. Apply ethical judgment in interpreting the rules and determining the public interest, recognising that the public interest should be placed ahead of self-interest even at the cost of a job or a client.
4. Determine how the AICPA Code and the Colorado Rules and Regulations apply across different practice settings, including CPAs in client practice performing attest and non-attest services, CPAs in industry providing internal accounting and auditing services, and CPAs in education or government.
5. Identify the Colorado statutes, rules and Board policies currently in effect and determine how they apply to a licensee, including the organization and duties of the Board; proper use of the CPA designation and the types, status and maintenance of certificates; licensure, examination and certification; continuing professional education; disclosures, names, mobility and reciprocity; peer review; unlawful acts; accountant-client privilege; client records; grounds for disciplinary action; and firm registration, firm names and firm-level peer review and disclosure obligations.