About the Indiana CPA Society’s Ethics Committee and what it does … when most people hear “ethics committee” and “code of professional conduct,” their thoughts automatically go to the really serious violations we hear about because a member has been terminated from INCPAS membership. But in reality, the ethics committee’s role is much more involved than that. The high profile cases are infrequent. There was only one member terminated from INCPAS membership in 2012 for an ethics violation. While the committee does investigate complaints when a report is filed that a member has violated the code of professional conduct, a much larger part of the committee’s responsibility is to be available to serve as advisers when a member calls with a question about handling an ethical situation.
AICPA has an ethics hotline, as well, so we don’t have precise data of the total number of calls made by Indiana CPAs with ethics questions, but from 2008-12, the INCPAS Ethics Committee answered 121 ethics calls from members and consumers. During that time, 32 ethics cases were opened by INCPAS, and 17 more by AICPA. The most common cases were tied to violation of rules within the Code of Professional Conduct, primarily Rule 102 – Integrity and Objectivity, Rule 201 – General Standards, Rule 202 – Compliance with Standards and Rule 501 – Acts Discreditable.
When an ethics case is opened, the complainant is anonymous, and submits a formal complaint. From there, the committee reaches out to the member to inform them of the complaint and provide a chance to provide information in response to the complaint. The committee will look at the complaint and response to see if further investigation is needed to determine if a violation has occurred. If further information is needed, the committee will assign the case to a subcommittee that conducts an investigation by collecting further information and conducting interviews with both parties to the complaint. Once the subcommittee has finished the investigation, they look at the facts of the case against the Code of Professional Conduct to see if a violation has occurred. In the event they do find a violation, the subcommittee will look at the severity of the violation and make recommendations for corrective action.
The ethics process is intended to be more educational than punitive, so the most commonly recommended corrective action is continuing professional education specific in subject matter to the violation that occurred. In the rare event that a severe violation occurs, the resulting punishment is also more severe and could include admonishment, suspension, or most severely, termination from membership.
Remember, the ethics committee is a resource for you if you ever find yourself in a questionable situation. Call the committee to avoid having them call you!