Why is integrity important to CPA? CPAs are responsible for ensuring the accuracy and completeness of financial information needed to efficiently allocate resources in a market economy. CPAs also are often responsible for compliance with tax and regulatory requirements.
Failure by CPAs to fulfill these responsibilities can create a major loss of trust in financial markets. Specific failures of integrity on the part of CPAs can lead to massive investor losses and the bankrupting of companies.
Arthur Andersons’ audit failures involving Enron represent a salient example. Investors lost millions, employees lost their jobs, and much of their pensions.
What are the ethical obligations of a CPA?
The primary ethical obligation of CPAs is to maintain an independent and skeptical point of view in reviewing and auditing financial statements. They must not engage in activities that would compromise their independence.
CPAs must not subordinate their judgment to others…
