Ethics for Kentucky CPAs – 2 Hours

Kentucky asks for two hours of ethics every two years, and this two-hour course is built to that requirement. It covers Title 201, Chapter 1 of the Kentucky Administrative Regulations — Part 300, the Rules of Professional Conduct, and Part 290, the Standards of Practice — together with the sections of Kentucky Revised Statutes Chapter 325 that govern client records and confidentiality.

Kentucky's approach is distinctive in its brevity: 201 KAR 1:300 does not restate a code of its own but incorporates the AICPA Code of Professional Conduct by reference, requiring every licensee and firm to comply with the AICPA's interpretations as adopted by the Board. That makes a thorough working knowledge of the AICPA Code not merely advisable for a Kentucky CPA but the substance of the state requirement itself, and the course covers it accordingly.

201 KAR 1:290 is covered in full, including the standards of practice a licensee must follow when performing a regulated activity — the AICPA Professional Standards across the SSARS series on preparation, compilation and review, the Statements on Standards for Valuation Services, Government Auditing Standards, the auditing standards of the PCAOB, and the International Standards on Auditing — together with the accounting principles rule and the narrow circumstances in which a licensee may depart from the applicable financial reporting framework, the generally accepted auditing standards applicable to public companies and to entities receiving federal financial assistance, and the requirements of Treasury Circular 230 when practising before the Internal Revenue Service.

From the statutes, the course covers KRS 325.420 on the materials a licensee must furnish to a client and the ownership of working papers — including the rule that client-provided records go back on request and reasonable notice, and that copies of returns, reports and those working papers constituting part of the client's records follow on payment for services previously provided — and KRS 325.440 on confidentiality of information obtained in practice, with its four exceptions.

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 with its network firm, alternative practice structure, financial interest, loan, lease, litigation, staff augmentation and nonattest services provisions, 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. The independence material is current, covering the determining fees and fee dependency interpretations effective January 2025, the revised executive and employee recruiting rules effective January 2026, and the revised interpretation on simultaneous employment or association with an attest client effective September 2026.

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 as cases where prevailing moral views pulled ethical standards above what the law required, and works through the conceptual framework with two extended case studies — a president who loads a trailer and parks it in the lot on 31 December to make budget, and a friend whose cash restaurant reports a loss and who says the figures are the ones he wants reported.

Learning objectives

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

1. Define ethics from an overall and professional perspective.
2. Describe the rules of professional conduct contained in the Kentucky Administrative Regulations, Title 201, Chapter 1, Part 300 and Part 290.
3. Describe the ethical standards contained in the AICPA Code of Professional Conduct.