AICPA code of conduct
/ AICPA = say the letters A-I-C-P-A /
Most professions that hold public trust — doctors, lawyers — have a written code that members promise to live by. Accounting is the same. The AICPA Code of Professional Conduct is the rulebook of ethics for US certified public accountants, issued by the American Institute of Certified Public Accountants (AICPA), the main national professional body. It turns broad ideas like 'be honest' into specific, enforceable expectations.
The Code is built around principles and then concrete rules. Its guiding principles include responsibilities to the public, integrity, objectivity and independence, due care, and serving the public interest. From these flow detailed rules — for example, that a CPA auditing a company must be independent of it (no significant financial or close personal ties), must not knowingly misrepresent facts, must keep client information confidential, and must avoid conflicts of interest. A distinctive feature is its 'conceptual framework' or threats-and-safeguards approach: rather than listing every forbidden act, it asks the CPA to identify threats to compliance (such as self-interest or intimidation), evaluate how serious they are, and apply safeguards to reduce them to an acceptable level.
The Code matters because it backs the CPA's trust badge with teeth: violating it can lead to discipline, including loss of AICPA membership, and it often dovetails with state board rules that can suspend or revoke the actual license. Two honest notes: the AICPA is a private professional body, so for public-company audits its code works alongside binding rules from regulators like the SEC and PCAOB, whose independence requirements can be even stricter. And a code can guide and punish, but it cannot by itself make a person ethical — it sets the floor, not the ceiling.
A CPA is asked to audit a company in which his sister is the chief financial officer. The Code's threats-and-safeguards approach flags a 'familiarity' threat to independence so serious that no safeguard can fix it. The right answer is to decline the engagement — the appearance of bias alone is enough to disqualify him.
The Code asks accountants to spot threats to independence and step away when no safeguard suffices.
The AICPA is a private professional body, so its Code is not the only authority: for public-company audits, the SEC and PCAOB impose binding, sometimes stricter, independence rules. The Code sets a minimum standard of conduct, not a guarantee that everyone who is technically compliant is behaving well.