Ethics for Kansas CPAs – 2 Hours

Kansas asks for two hours of professional ethics every two years, and this two-hour course is built to that requirement. It covers Article 5 of the Kansas Accountancy Regulations — the Code of Professional Conduct — together with the AICPA Code of Professional Conduct, which Kansas adopts by reference and applies to every certified public accountant and firm regardless of AICPA membership.

The Kansas material is covered part by part. Part I deals with definitions, independence, integrity and objectivity, commissions and referral fees, and contingent fees — including the professional standards Kansas incorporates by reference and the specific sections of the AICPA Code it does not adopt. Part II covers the general standards a CPA must meet before undertaking an engagement: professional competence, due professional care, adequate planning and supervision, and sufficient relevant data, together with compliance with the standards promulgated by the fourteen bodies Kansas names, and the accounting principles rule. Part III addresses confidential client information. Part IV covers other responsibilities and practices — acts discreditable, acting through others, advertising and the prohibition on using a non-CPA name or an unregistered firm name in any advertisement placed under a heading used for CPAs, use of the CPA designation while performing non-attest services, CPAs who own a separate business, and the firm and professional name rules including what Kansas treats as misleading and what a fictitious name requires.

Alongside the Kansas 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 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, form of organization and name, the obligation of a member to an employer's external accountant, and pressure to breach the rules.

The course opens with the reasoning behind the rules, separating morals from ethics and showing 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, and setting out the five core foundations of independence, integrity, objectivity, public interest and due care.

Three Kansas 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 CPA whose only experience is individual tax returns proposing to trade and advertise as Audit Experts.

Learning objectives

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

1. Recognize ethics from an overall and professional perspective.
2. Identify the ethical standards contained in Article 5 of the Kansas Accountancy Regulations.
3. Identify the ethical standards contained in the AICPA Code of Professional Conduct.