Ethics for Georgia CPAs – 4 Hours

Georgia does not accept a generic ethics course. Under Board Rule 20-11-.02(3), the four ethics credits a Georgia CPA must complete each reporting period have to include at least one credit specific to the laws, rules and policies of the Georgia State Board of Accountancy. This four-hour course is built to that structure, and covers the Georgia material in the detail that requirement implies.

The Board's Code of Professional Conduct at Chapter 20-12 is covered rule by rule: independence and the specific circumstances Georgia treats as impairing it, including financial interests, trusteeships, joint closely held investments and loans; integrity and objectivity, and the latitude a licensee does and does not have to resolve doubt in a client's favour in tax practice; commissions and contingent fees, with the services that bar them and the written disclosure required where they are permitted; incompatible occupations; competence; auditing standards and accounting principles; forecasts; confidential client information; the obligation to return client records; discreditable acts; acting through others; advertising and solicitation, including the eight categories of statement Georgia treats as false or misleading; permitted forms of practice and the majority-ownership rule; firm names and the two-year window a surviving sole owner has; the thirty-day deadline for responding to Board communications; and the requirement to conform to other recognised professional standards.

Continuing education is covered in full at Chapter 20-11: the eighty-credit biennial requirement with its twenty-credit annual minimum and fifty per cent technical floor, the reduced requirement for newly licensed CPAs, the four ethics credits including the Georgia-specific credit, the fifteen-credit non-technical carry-forward, the exemption at age seventy, which learning activities and sponsors qualify, how credits are computed for self-study, nano-learning, instruction and authorship, the five-year record retention rule, and CPE reciprocity for non-resident licensees.

The course also covers the attest and compilation standards at Chapter 20-15; biennial renewal, the four-month penalty period and reinstatement at Chapter 20-10, together with the continuing education a reinstating licensee must show; individual practice privileges, mobility and reciprocity at Rule 20-3-.09; firm registration at Chapter 20-8; peer review at Chapter 20-13; and Georgia Code Title 43, Chapter 3, Section 43-3-29 on the ownership of working papers, the confidentiality of client communications, and the protection of peer review material from discovery.

Alongside the Georgia rules, the course covers the AICPA Code of Professional Conduct across all three of its parts — members in public practice, members in business, and other members — including integrity and objectivity, preparing and reporting information, responding to noncompliance with laws and regulations, independence, the general standards and compliance with standards rules, accounting principles, acts discreditable, contingent fees, commissions and referral fees, advertising, confidential client information, and form of organization and name.

The reasoning behind the rules gets equal weight. The course separates morals from ethics and shows where the two diverge, using Prohibition and the Nike contract manufacturing controversy of the 1990s as cases where prevailing moral views pulled ethical standards above what the law required. It offers two practical tests — the Publicity Standard and the Person Looking Over Your Shoulder Standard — sets out the conceptual framework of threats and safeguards for situations no rule addresses, and examines the motivations that precede most ethical lapses: greed, self-interest, undue influence and familiarity. Arthur Andersen at Enron and the audit of Bernard Madoff Investment Securities anchor the discussion of what the public expects of a CPA.

Georgia case studies apply the rules directly: an audit client asking for a smaller bad debt adjustment so it can clear a bank loan covenant; a fee quoted as the greater of a fixed amount or a percentage of a client's tax refund; and a newly licensed CPA whose only experience is individual tax returns proposing to trade as Audit Experts Group. The course also draws on the Board's own newsletters, including its observation that one of the most common complaints it receives is a CPA refusing to return client records, and the issues that most often surface in a CPE audit.

Learning objectives

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

1. Recognize ethics from an overall and professional perspective.
2. Recognize the ethical standards contained in the Georgia State Board of Accountancy rules.
3. Recognize the ethical standards contained in the AICPA Code of Professional Conduct.