Ethics for New Hampshire CPAs – 4 Hours

New Hampshire rewrote most of its ethics rules with effect from 5 April 2025, and this four-hour course covers them as they now stand. It is designed to meet the four-hour ethics CPE requirement a New Hampshire CPA must complete every three years, and works through Chapter Ac 500 of the Board of Accountancy Rules in full, together with the parts of Chapter Ac 400 that carry ethical obligations.

The course opens with applicability — which rules reach a licensee practising outside the United States, when a licensee is answerable for the conduct of people under their supervision or their partners and shareholders, and the prohibition on having others do indirectly what the licensee could not do directly. Independence follows, with the specific circumstances New Hampshire treats as impairing it: direct or material indirect financial interests, service as trustee or executor of an estate holding such an interest, joint closely held business investments, loans to or from the enterprise and the narrow exceptions for ordinary bank lending, and connection with the enterprise as promoter, underwriter, voting trustee, director, officer or pension trustee. Integrity and objectivity are covered at Ac 503, and the general standards at Ac 504, where the Board adopts the AICPA Code of Professional Conduct and adds five duties of its own — competence, due professional care, planning and supervision, sufficient relevant data, and cooperation with investigations and requests for information from the Board and the OPLC.

Confidential client information receives particular attention because New Hampshire goes further than most states. Beyond the general rule and its exceptions, Ac 505.02 sets out what a licensee must do before using a third-party service provider: enter a binding, enforceable contractual agreement on confidentiality, obtain reasonable assurances that the provider has procedures to prevent unauthorised release, and give the client a written disclosure. Ac 404.02 then requires that disclosure to be a separate written statement describing the services the third party will render, giving the client an opportunity to opt out and clear instructions on how to do so — and the licensee remains responsible for the provider's continuing compliance with the whole of Chapter Ac 500.

The course also covers contingent fees, including the flat prohibition on receiving one for preparing an audit, review or compiled financial statement and the narrow exception for an amended return the licensee reasonably expects will be substantively reviewed by the taxing authority; advertising and solicitation, with the specific prohibition on coercion, over-reaching and harassing conduct; commissions and referral fees; firm names and the two-year window a surviving sole owner has to continue under the old name; and the registered investment advisor rule at Ac 507.05, under which acting as an RIA is not an incompatible occupation, a licensee may be paid at an hourly rate, a fixed rate or a percentage of assets under management, but may not accept commissions and remains subject to the independence standards.

Peer review is covered at Ac 405, including the point that agreed-upon procedures engagements trigger it alongside audits, reviews and compilations; the thirty-day deadline to notify the Board and document enrolment after first being engaged; the eighteen-month deadline to undergo the review and twenty-four months for the final acceptance letter; what an accept-provided-that letter is and when it is needed; and the three-year cycle. Ongoing requirements at Ac 404 cover the thirty business day notice a CPA must give the Board on severing a connection with any firm, and the retention of client records — records returned immediately on demand, the express prohibition on retaining client records to force payment of any kind, which work papers count as part of the client's records and which remain the CPA's property, and the five-year minimum retention period for work product and work papers.

Alongside the New Hampshire 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, 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 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; offers the Publicity Standard and the Person Looking Over Your Shoulder Standard as practical tests; sets out the conceptual framework of threats and safeguards with worked illustrations of each threat category; and examines the motivations that precede most ethical lapses. Arthur Andersen at Enron, the audit of Bernard Madoff Investment Securities, and Phar-Mor anchor the discussion of what the public expects of a CPA.

Six New Hampshire case studies apply the rules directly: a firm that issued a review report while one of its partners served as executor of an estate holding shares in the client; an audit client asking for a smaller bad debt adjustment so it can clear a bank loan covenant; a tax practitioner with no audit experience who wants to start performing audits; a fee quoted as the greater of a fixed amount or a percentage of a client's tax refund; a practitioner who performed one compilation as a favour; and an unpaid auditor holding client-provided records.

Learning objectives

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

1. Define ethics from an overall and professional perspective.
2. Identify the ethical standards contained in the New Hampshire Board of Accountancy Rules.
3. Identify the ethical standards contained in the AICPA Code of Professional Conduct.