Ethics for Nevada CPAs – 2 Hours

Nevada asks for ethics CPE every single year, not every two or three. Under NAC 628.210 a licensee renewing a permit to engage in the practice of public accounting must complete forty hours of continuing education in each calendar year, of which two hours must be in professional ethics — and a further eight hours must be in accounting and auditing in any year the licensee worked on an audit, review, full disclosure compilation or attestation engagement. This two-hour course is built for that annual ethics requirement.

The Nevada material comes from Chapter 628 of the Nevada Administrative Code, and the course covers the parts that bear on conduct. It begins with the standards of practice, where Nevada adopts the AICPA Code of Professional Conduct by reference but with six specific exceptions: references to a member are read as references to a practitioner; the Code's definition of financial statements is replaced with Nevada's own, which reaches cash-basis and other comprehensive basis statements and expressly excludes tax returns and supporting schedules; public practice takes the meaning given in NRS 628.023; the signature of a tax return preparer does not constitute an opinion on a financial statement and needs no disclaimer; Appendix B of the Code is not adopted at all; and the commission disclosure requirement is replaced with a far more prescriptive one.

That commission rule deserves its own note. Where the AICPA Code requires disclosure, Nevada specifies its form: the disclosure must state the amount of the commission in dollars or describe the calculation method in plain language, must name the person or entity paying it, must be in writing, must be made on or before the date of the referral or recommendation, and must be signed and dated.

The course also covers applicability — including when a practitioner working outside Nevada nonetheless falls under these rules, and a practitioner's responsibility for those under their supervision and for acts done on their behalf by others. Reporting obligations at NAC 628.520 are covered in full: the thirty-day deadline that follows a peer review or inspection report with identified deficiencies, any disciplinary decision by another state's accountancy regulator, a federal or state agency, the AICPA or the PCAOB, any settlement, award or judgment of one hundred and fifty thousand dollars or more for gross negligence, violation of a standard, fraud or misappropriation, any criminal charge, conviction, nolo plea or deferred prosecution beyond a minor traffic offence, and being named as a defendant in an administrative or civil action relating to public accounting or alleging dishonesty, fraud, misrepresentation or breach of fiduciary duty.

Continuing education is covered as a subject in its own right, since one of the course objectives is directed at it: the annual forty-hour requirement and its ethics and accounting-and-auditing components, the exemption for a licensee seeking the first annual renewal of an initial permit, how a licensee residing and licensed in another state demonstrates compliance, and the hardship waiver. It also covers what makes a programme qualify, the acceptable subject areas, how credit is determined for university courses, self-study, authorship and instruction, and the three-year record retention rule with the documentation the Board will accept. The unlawful practice rule at NAC 628.460 closes the Nevada material, including what counts as holding oneself out as a certified public accountant.

The AICPA Code is then covered in detail 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 with the separate and heavier duties it places on senior professional accountants, independence with its network firm, alternative practice structure, financial interest, loan, lease, litigation, staff augmentation and nonattest services provisions and the determining fees and fee dependency interpretations effective January 2025, 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, and pressure to breach the rules.

The reasoning behind the rules is covered first. 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; sets out the five core foundations of independence, integrity, objectivity, public interest and due care; and works through the conceptual framework of threats and safeguards. Two case studies apply it: a controller whose president 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 continuing education requirements contained in Nevada Administrative Code, Chapter 628.
3. Describe the ethical standards contained in the AICPA Code of Professional Conduct.