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Accountants are subject to the rules and regulations of a number of entities. These can include (3):
- Professional organizations
- Federal Governmental entities
- State governmental entities
the national professional organization for CPA's (like AMA for doctors). They provide resources and information to members and coordinate activities with state CPA societies.
AICPA (American Institute of Certified Public Accountants)
Promulgates the AICPA Cod of Professional Conduct Sanctions members for violations (usually follows an action by the state board, the SEC, the PCAOB, the IRS etc)
The professional ethics division of the AICPA
A state-wide professional organization for CPAs. Provide information and resources on national and state wide issues. May advocate for (or against) legislation and or regulation.
encourages global adoption of high ethical standards. The AICPA is a member of this organization. Their ethics code is a foundation for the AICPA ethics code.
IFAC (International Federation of Accountants)
A federal Governmental Entity. Empowered by Congressto regulate financial reporting by publicly held companies. They also establih and enforce rules on accounting and auditiong. These include rules on auditor independence.
SEC ( Securities and Exchange Commision)
A federal Governmental Entity. Created by passage of SOX. Overseen by the SEC. They establish rules with respect to auditing and other attestation engagements, quality control of audits, and independnece of public company auditors.
PCAOB (Public Companies Accounting Oversight Board)
A federal Governmental Entity. A branch of the U.S. Treasury which is authorized by the IRC to issue rules and regulations to enforce U.S. tax law. Treasury Dept. Circular 230 governs federal tax practice by CPAs, enrolled agents, attorneys, actuaries, etc. The regulations laid out in this cirular are enforced by the IRS Office of Professional Responsibility. (OPR)
IRS (Internal Reven Service)
A federal Governmental Entity. Issue the rules with respect to governemtn audits, often referred to as the Yellow Book. These include ethics and independnece rules that apply to individuals and entities that carry out these audits.
GAO (Governemnt Accountability Office)
A federal Governmental Entity.Issue rules with respect to the audit of employee benefit plans. These include independence rules that apply to such auditiors.
Department of Labor(DOL)
Federal Governmental Entities. Auditors of banks, savings and loans, credit unions, and other financial institutuions are subject to separate rules promulgated by entities such as the (2)
FDIC and FSLIC (Regulators of Financial Institutions)
Insurance is regulated by:
- The States.
- Audits of insurance entities may be governed to some extent by state statutes and or rulings of state insurance commisions.
A State Governmental Entity. Issues your license. Frontline of oversight on ethical behavior.
State Board of Public Accountancy.
State ethics codes may: (3)
- Be created entirely seperately from AICPA rules
- Be very similar to AICPA rules
- Simply incorporate AICPA Rules
If you're auditing a publicly trades entity, you may be subjet to independence rules of multiple entities(AICPA, SEC, PCAOB) Which rule prevails?
Always follow the most restrictive requirements.