Ethics Regulation By The Accounting Profession

Abstract

Because of recent accounting and management scandals, the accounting profession is under attack. Accountants have been accused of taking unethical actions such as overstating revenues. 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. This research finds a difference in the ethical requirements across the 53 State Boards of Accountancy in the United States. Nineteen of the 53 Boards (35.8 percent) require no separate ethics testing. 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. This finding could be attributed to the change in the Business Law section of the CPA exam. We find that some state Boards believe that ethics is now adequately being tested within the exam.