CPAs vote to strengthen ethics enforcement

The American Institute of Certified Public Accountants announced Oct. 20 that its members voted overwhelmingly to strengthen the institute's ethics enforcement process. This ensures that the AICPA has greater flexibility to act in the public interest in the event that a member violates the profession's code of ethics.

"Our membership voted overwhelmingly at a 7-to-1 ratio to increase the timeliness and transparency of our disciplinary process," said William F. Ezzell, AICPA chairman, in a news release. "These enhancements are clear evidence that the AICPA will not tolerate those who break the rules."

The vote involved two proposed changes to the bylaws.

The first bylaw change will benefit the public and members because it will:

permit the AICPA to sanction members in a more timely manner. The institute will now be able to sanction a member without investigation if the member has been sanctioned by an approved organization such as the SEC, IRS or PCAOB;

expand the institute's ability to impose automatic sanctions based on state board disciplinary actions not involving licensure suspensions and revocations, instead of having to conduct a full investigation which lasts, on average, 18 months; and

frequently eliminate the need for repeat investigations by multiple bodies on the same matter while preserving a member's current right to appeal.

The second bylaw change will:

give the AICPA the flexibility to disclose more information about disciplinary matters; and

allow the institute to disclose the results of all cases to an individual or body filing a formal complaint with the institute thus ensuring that complainants are informed as to when and how an investigation was concluded.

Currently, the institute does not disclose to a complainant private remedial actions taken against members or actions concluded with no finding or no violation.

"These changes serve the public interest and strengthen the enforcement process," said Susan Coffey, vice president of self-regulation and SEC practice section. "The public trusts that CPAs will do the right thing and the institute has a duty to maintain an ethics enforcement process that bolsters public confidence in its members."

The American Institute of Certified Public Accountants (www.aicpa.org) is the national, professional organization of CPAs, with more than 340,000 members in business and industry, public practice, government and education. It sets ethical standards for the profession and U.S. private company auditing standards. It also develops and grades the Uniform CPA Examination, which will convert to a computerized format in 2004.