Ethics for Oregon CPAs – 4 Hours

A CPA is challenged in today's work world to serve not only their client or employer, but also to protect the public interest by ensuring that there is transparency in financial reporting and fair administration of the tax laws. In balancing those two duties, a CPA can find themselves in a genuine ethical dilemma — and the harder problem is rarely knowing what is right. It is doing it.

This four-hour course is built in three parts.

Part I — Values: a straight and narrow path or a minefield?
Establishes the ethical framework. It distinguishes normative ethics, which addresses right and wrong action, from applied ethics, which is how a normative system plays out in practice — business and accounting ethics being a form of the latter. It then works through the three major normative schools: consequentialism, including Bentham's utilitarianism, the hedonist's paradox and Mill's refinement toward the happiness of all affected; deontology, with its focus on duty irrespective of outcome and its characteristic weakness of treating "following the rules" as the end of the inquiry rather than the beginning; and virtue ethics. The section closes on the point that meeting the rules is the starting point for whether a matter is ethical, not the finish — after confirming a transaction meets the minimum legal requirement, the CPA should still ask whether it subverts the policy the rule exists to serve.

Part II — Codes of conduct for CPAs
The regulatory core, and where the Oregon-specific content lives. It covers the AICPA Code of Professional Conduct alongside the Oregon Revised Statutes and the Oregon Administrative Rules, including the formation and authority of the Oregon Board of Accountancy (ORS § 673.410), reciprocal practice privileges (§ 673.153), disciplinary actions (§ 673.170), requirements for providing attestation services (§ 673.320), and permits, renewals and fees (§ 673.150).

From there it works through the substance of professional conduct:

Independence — the Integrity and Objectivity Rule, the definition of independence, and the seven named threat categories under the conceptual framework: adverse interest, advocacy, familiarity, management participation, self-interest, self-review and undue influence, each with worked examples.

Integrity and objectivity — subordination of judgment, conflicts of interest, knowing misrepresentation in the preparation of financial statements or records, and client advocacy.

Dealing with threats — the conceptual framework for members: identify the threat, evaluate its significance, apply effective safeguards.

Responsibilities to the public — the public interest provision at ORS § 673.015, misleading firm names, false or deceptive acts in promoting professional services, and the advertising and solicitation rule.

Responsibilities to clients and employers — due care, competence, continuing education requirements under ORS § 673.165 and OAR § 801-040-0010, peer review programs, unpaid fees, records requests, notification to clients, and disposition of records.

Confidentiality — accountant/client privilege, the Confidential Client Information Rule, disclosure of client information under ORS § 673.385 and OAR § 801-030-0015.
Fees — the Contingent Fees Rule, the Commissions and Referral Fees Rule, and the Oregon provisions at ORS § 673.345.

Responsibilities to the Board and the profession — the Acts Discreditable Rule and its specific applications: discrimination and harassment in employment practices, failure to file a tax return or pay a tax liability, negligence in preparing financial statements or records, dealings with governmental bodies and regulatory agencies, use of the CPA credential, and the form of organization and name rule.

Part III — Behaving ethically: putting the rules into action
Turns to practice. It catalogues eighteen unethical rationalizations and misconceptions — "everybody does it," "if it isn't illegal it's ethical," "no harm no foul," "what they don't know won't hurt them," "it's for a good cause," "if I don't do it somebody else will," "ethics is a luxury we can't afford right now" — as a set of ethics alarms a CPA can learn to recognise in themselves and others. It covers ethical conflicts under ET § 1.000.020, the warning signs that an organisation is heading toward ethical collapse, and Cherrington and Cherrington's steps for rebuilding moral character: recognise what is wrong; feel remorse, being sorry for the action rather than for being caught; resolve to change; plan new behavioural intentions; and demonstrate improved moral behaviour.

Throughout, the material is taught through case studies drawn from real events as well as hypothetical fact patterns — among them the WorldCom restatements and Cynthia Cooper's internal audit team, Toronto-Dominion Bank's 2005 decision to exit the structured products market before the asset-backed commercial paper crisis, and the embezzlement at Collin Street Bakery in which a single employee took more than $16.8 million from a family business over more than nine hundred occasions.

The course concludes with three appendices reproducing the source law: the Oregon Revised Statutes Chapter 673, the Code of Professional Conduct at OAR § 801 Division 30, and the continuing professional education rules at Division 40.

Written for CPAs in every kind of practice — assurance, attest and compilation, tax, industry and government.

Learning objectives

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

Apply the ethics of professional accounting as CPAs through the analysis of case studies involving both actual situations and hypothetical facts.

Apply ethical judgment in interpreting the rules and determining public interest, recognising that the public interest should be placed ahead of self-interest even if it means the loss of a job or a client.

Analyze and apply the AICPA Code of Professional Conduct and the Oregon law pertaining to CPAs licensed to practice in the State of Oregon, becoming familiar with the Oregon Revised Statutes, the Administrative Rules and Code of Professional Conduct, and the policies adopted by the Board currently in effect, and how those statutes, rules and policies apply to them.

Determine the course of action that would uphold the intent of the rules in the performance of professional accounting services and work, rather than mere technical compliance with those rules.

Review and discuss the rules and their implications for persons in a variety of practices, including CPAs who provide assurance, attest or compilation services, and CPAs who provide tax services.