Why a CPA Ethics Exam?

Both the magnitude and number of business scandals in recent years have given enough reason to reassess the accounting profession’s regulatory environment. This brought about the advent of a CPA ethics exam. As a result of said scandals people’s confidence on what is stated on a company’s financial statements have somewhat receded. Along with that decline comes a loss of trust in the ethical standards upheld and practiced by today’s CPAs.

Though laws have been enacted with the goal to rebuild the confidence and trust in the accounting profession it has been seen clearly as not enough. One of the most significant of these laws is the Sarbanes-Oxley of 2002 which created the Public Company’s Accounting Oversight Board. There was also an effort to raise the standard against fraud detection. However, these laws and standards have proven insufficient to achieve the lofty goal of restoring the lost trust in the accounting profession.

Reinforcing Ethics in Education

Here are some of the issues that reinforce the need for a CPA ethics exam. The issue on emphasizing ethics in accounting education isn’t an original idea. Obviously, CPA’s will many decisions that will eventually have ethical implications. As early as the year 2000 a study was conducted that shows integrity, ethics, and values should be bolstered within the circles of accounting education. Do take note that the study was conducted about a year before the huge business and financial scandals of the year 2001.

Furthermore, according to the said study conducted by Albrecht and Sack, there are certain weaknesses in accounting education. For instance, accounting students have been trained in such a way that they tend to memorize certain patterns in their profession and less on gaining analytical skills. Though commendable, being stuck in thinking within the box will not be able to cope with the ambiguities within the business world.

It has been understood that emphasizing values and integrity through a CPA ethics exam will stress the need for higher ethical standards among upcoming CPAs. Some of the approaches to do this include increasing the number of ethics questions in the CPA exam, expanding its scope, simulating ethical decision making, and requiring a separate CPA ethics exam before being granted a license.

Answering a Couple of FAQ’s

Does each state conduct its own CPA ethics exam? Yes. It is understood that each state’s board will have their own ethics exam and certification requirements. Check with your state’s board of accountancy for specific requirements.

Can I get a CPE credit from another state? Yes. You can transfer it from one state to another. However, you should still check with your state’s board for specific guidelines to ensure accreditation.