Ethics Regulation By The Accounting Profession

Abstract

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-size: 10pt; mso-bidi-font-weight: bold;"><span style="font-family: Times New Roman;">Because of recent accounting and management scandals, the accounting profession is under attack.<span style="mso-spacerun: yes;">  </span>Accountants have been accused of taking unethical actions such as overstating revenues.<span style="mso-spacerun: yes;">  </span>This paper examines the changes in ethical standards of the accounting profession in the United States and the role of ethics regulation by the State Boards of Accountancy.<span style="mso-spacerun: yes;">  </span>This research finds a difference in the ethical requirements across the 53 State Boards of Accountancy in the United States.<span style="mso-spacerun: yes;">  </span>Nineteen of the 53 Boards (35.8 percent) require no separate ethics testing.<span style="mso-spacerun: yes;">  </span>The increase in litigation and debate over ethical issues in recent years has failed to lead to an increase in separate ethics testing by the Boards.<span style="mso-spacerun: yes;">  </span>This finding could be attributed to the change in the Business Law section of the CPA exam.<span style="mso-spacerun: yes;">  </span>We find that some state Boards believe that ethics is now adequately being tested within the exam.</span></span></p>