Business and accounting exist in an environment in which many is-
sues and events cannot be interpreted as absolutely right or wrong. Every
decision or choice has pros and cons, costs and benefits, and people or
institutions who will be affected positively or negatively by the decision.
In a setting where many issues and events fall between the extremes of
right and wrong, it is very important that accountants and business-
people maintain high ethical standards. Several groups have established
codes of ethics that address ethical behavior to help accountants and
their business associates work their way through the complicated ethical
issues associated with business issues and events. These groups include
the American Institute of Certified Public Accountants (AICPA), the
Institute of Management Accountants (IMA), the International Fed-
eration of Accountants (IFAS), and most large companies.
Members of the AICPA adopted a code of professional conduct
that guides them in their professional work. It addresses such issues as
self-discipline, honorable behavior, moral judgments, the pubic inter-
est, professionalism, integrity, and technical and ethical standards. The
IMA has a code of conduct that is similar to the AICPA’s code. It ad-
dresses competence, confidentiality, integrity, and resolution of ethical
The IFAS is an independent, worldwide organization. Its stated pur-
pose is to “develop and enhance a coordinated worldwide accountancy
profession with harmonized standards.” As part of its efforts, it has de-
veloped a code of ethics for accountants in each country to use as the
basis for founding their own codes of ethics. Because of the wide cul-
tural, language, legal, and social diversity of the nations of the world, the
IFAS expects professional accountants in each country to add their own
national ethical standards in the code to reflect their national differences
or even to delete some items of the code at their national level. The code
addresses objectivity, resolution of ethical conflicts, professional compe-
tence, confidentiality, tax practice, cross-border activities, and publicity.
It also addresses independence, fees and commissions, activities incom-
patible with the practice of accountancy, clients’ money, relations with
other professional accountants, and advertising and solicitation.
2. Read the text again and answer the following questions:
– What professional accounting organizations are mentioned in the
– What have these organizations done in terms of professional ethics?
– What major issues do accountants’ codes of ethics address?
3. In each paragraph of the text find the key topic sentences that carry
the main load of logic and a few of those that are closely related to them. On
this basis prepare a summary of the text consisting of 5–7 sentences.
4. Find in Supplementary Reading the excerpts from AICPA Code of
Professional Conduct and render their main idea in Russian.
1. Before you read the article below, exchange information with your
partners on the following question:
· Have you heard anything about the scandal associated with the
American energy giant Enron or any other business scandals in the
United States or Europe involving accounting?
2. Read the text and learn about recent developments in the accounting
profession in the USA.