Ethical Standards and Your Accounting Practice

Your Pennsylvania accounting clients are trusting you with their finances; it’s not much of an exaggeration to say they’re trusting you with their lives – or at least, their livelihood. Therefore, they must have absolute confidence in your honesty, credibility, and ethics. The best way to build this confidence is to clearly demonstrate and promote your ethical standards on your website and in your communications. 

Accounting Ethics and Codes of Conduct

The governing bodies of accountancy in the United States have developed principles of ethics that should govern our decisions as accountants. In order to maintain our CPA status, we are required to earn 4 CPE hours in ethics over a two-year period, which demonstrates the industry’s commitment to maintaining ethical standards. PSTAP offers CPE courses throughout the year, including ethics courses, to help you stay educated on this important topic. 

Basic Principles of Ethics

Different professional accountancy organizations have slightly different expressions of the fundamental ethical principles of accountancy, but they generally fall into several main categories: integrity, objectivity, professional competence, confidentiality, and professional behavior, generally defined as follows:

  • Integrity – honesty in professional relationships
  • Objectivity – free from bias, conflict of interest, or undue influence from others
  • Professional competence or credibility – maintaining professional standards of knowledge and skill
  • Confidentiality – nondisclosure of personal information for the benefit of the accountant or any third party
  • Professional behavior – avoiding actions that discredit the profession, both inside and outside of one’s practice (law-abiding, “clean living”) 

The Critical Importance of Independence

Undergirding the principles above is the foundational principle of independence. Accountants must provide unbiased services and advice and must avoid conflicts of interest, both “in fact” and “in appearance.” A conflict of interest “in fact” might include recommending financial products for which you would earn a commission or auditing a company in which you hold stock. A conflict of interest or bias “in appearance” might include auditing a family member or auditing a company from which you accepted a valuable gift.

In addition, clients must not allow their personal opinions or the opinions of a third party to affect their objective service to their clients.

Building Your Reputation As an Ethical Accountant

Demonstrating your trustworthiness to your clients and your potential clients should include a statement on your website and social media accounts highlighting your personal commitment to honesty, objectivity, and integrity. Tell your clients what it means to you personally to be trusted with their financial information and how you consider it a duty to protect their information and provide them with the most ethical, unbiased advice and service. 

A personal statement of integrity is a powerful message. You can include a few particular steps you take to ensure the confidentiality and objectivity of your services (maybe include a list of technology used to safeguard data or a disclosure of financial organizations you are associated with). Finally, consider some testimonials from happy customers. These are all ways to telegraph to your audience your commitment to ethical standards which will set you apart from other accountants and help you forge a relationship of trust.