Not every auditor is the same. Each accounting firm has its own values, culture, and reputation that you should consider in addition to their quote. This month, we’ll dive into another key factor in choosing a trustworthy auditor for your company: Ethics.
Who Holds Accountants Accountable?
When auditors become Certified Public Accountants (CPA), they fall under a set of ethical standards enforced by the American Institute of Certified Public Accountants (AICPA) as well as their state’s CPA society. Standards include professional conduct as well as other laws and regulations.
Other members of the AICPA as well as nonmembers may file complaints against auditors that may have violated the Institute’s ethical standards. The AICPA responds to these complaints by investigating the member in question.
If the AICPA or other governing body finds an accountant guilty of violating their ethical standards, the accountant will receive disciplinary actions from the respective body and could have their membership suspended or revoked.
The most important thing to keep in mind is that auditors are not required to tell clients or potential clients of any disciplinary actions they have received.
Common CPA ethical violations include misrepresenting financial figures to boost a company’s net worth or misusing company resources for personal use.
Do Your Research
You can help protect yourself from hiring unethical auditors by searching the AICPA’s website for violations on the auditors handling your account. Remember that ethical violations are listed under the individual’s name, not the name of the firm.
Once you’re on the website, type at least their last name in the search bar at the top and hit enter. This will only produce results since 2011.
For earlier violations, perform a quick online search using your auditor’s name and the words “ethical violations” (i.e. John Doe ethical violations). Use your best judgment to find legitimate sources of information, whether it comes from government sites or news outlets.
If you have questions or need help understanding ethical issues in general or a specific violation, please feel free to contact us. We are here to serve you!
Want to learn more? Check out our blog series on how to choose an auditor.