A professional
accountant's responsibility is not exclusively to satisfy the needs of an individual client or employing organization.
Raising the Ethical Bar: The
Accountant's Responsibility for Addressing Noncompliance with Laws and Regulations (Fall 2016)
To preserve their honorableness, accountants should, more than anything else, be honest to themselves and their profession (Ionescu, 2016a, b), and inspect the suitability and concealed inferences of the accounting norms they employ as the latter have ethical consequences regarding the
accountant's responsibility to provide factual and precise pictures.
19 revises the reporting requirements for compilation and review engagements to make the reports clearer as to management's responsibilities and the
accountant's responsibility. In addition to the new compilation reporting option when the accountant's independence is impaired, the compilation reporting requirements require a title that clearly indicates that it is the accountant's compilation report.
Although it reinforces the
accountant's responsibility, it does not add any new accountability for planning and supervising the service provider's work beyond what is called for by applicable professional standards based on the type of engagement.
Rule 301 under the AICPA Code clearly states a professional
accountant's responsibility to hold client information confidential.
Although the language in AR-C section 90.54 clearly implies that any optional reference to the use of another CPA's work in a review report would properly be placed in an other-matter paragraph (AR-C section 90.78 and .A125-127)--at the reporting CPA's discretion--it is nevertheless illustrated in Exhibit C (AR-C section 90.A147) as part of the
accountant's responsibility paragraph.
.62 The disclosure of any evidence or information that comes to the accountant's attention during the performance of compilation or review procedures that fraud or an illegal act may have occurred to parties other than the client's senior management (or the client's board of directors, if applicable) ordinarily is not part of the
accountant's responsibility and ordinarily would be precluded by the accountant's ethical or legal obligations of confidentiality.
The rules had stated that the client must select a "competent employee" to oversee services, but that definition has been changed to require an individual with "suitable skill, knowledge and/or experience." This broader definition mitigates the
accountant's responsibility to evaluate employee competence.
Though reporting the suspected fraud or illegal act to parties other than senior management (e.g., parties outside the entity) would typically be beyond the scope of the
accountant's responsibility, Interpretation 26 lists the following three circumstances that would require such communication:
It is the fourth authoritative expression issued by the profession in the last twenty-five years that attempts to define the
accountant's responsibility to detect fraud when performing an audit of financial statements in conformity with generally accepted auditing standards (GAAS).
The assumption was that an
accountant's responsibility would be restricted to what was in the letter.
