Ethics Articles

  • Record Retention

    MICPA members receive record retention guidance through multiple sources. First, Michigan Administrative Rules for Accountancy has specific guidance in R 338.5104 Retention of documents. Second, the Administrative Rules refer to “the applicable nationally recognized professional standards setting organizations," which today is a reference to the AICPA Code of Professional Conduct, giving the Code of Professional Conduct the weight of law.
  • The Sale of a CPA Practice and Confidentiality

    This article addresses the ethical considerations pertaining to confidentiality that are applicable to both the potential seller and purchaser of a CPA practice.
  • Ethical Considerations of Outsourcing

    The AICPA’s Professional Ethics Division addressed the use of third-party providers as early as 1973 in Ethics Ruling No. 1, under the AICPA Code of Professional Conduct, Rule 301, Computer Processing of Client Returns (ET Section 391.001-.002). While that ethics ruling specifically deals with using outside services to process tax returns, it also would apply to any use of third-party providers.
  • Good Samaritan, Bad Results

    An MICPA member is asked to issue an audit report on the financial statements of a small non-profit organization with annual revenues of less than $50,000. Concerned with the financial restraints of the non-profit organization, the member asks for a nominal fee for the audit and promptly issues an audit report.
  • Transferring Client Records as a Firm Changes

    Q. What are the ethical considerations when transferring client records when there is a change in the CPA firm structure? A. The MICPA Professional Ethics Task Force has found itself responding to issues dealing with the transfer of client records to or from unrelated CPA firms.
  • Ethical Implications of a CPA Becoming a Real Estate Broker

    I am a licensed CPA who is considering becoming a real estate broker with my firm. What ethical implications must I keep in mind when acting as the real estate broker?
  • Failure to Secure Form 8879 Is Risky

    What are the implications if I E-File an income tax return prior to obtaining a completed IRS Form 8879?
  • Ethics Section 1.295 Performance of Non-attest Services and Small Firms

    The AICPA Code of Professional Conduct was revised in the past to encompass all practitioners – practicing CPAs as well as members in industry and education. The “one for all and all for one approach” addresses all members and applies the conceptual framework of independence unilaterally.
  • Books of Records to New Owner

    Scenario: During 2009, we prepared a 2008 corporate tax return for ABC, Inc. (C Corp organized in Delaware). ABC, Inc. was purchased in 2008 was operated out of Michigan. Previously, ABC, Inc. was owned and operated out of Delaware. This was the first time services were performed for the owner or ABC, Inc.
  • Tax Preparation Presents Sticky Situation in Partnership

    Scenario: A CPA is engaged by a close friend (Partner A) and individual client to do monthly bookkeeping and prepare tax returns for a partnership (ABC LLC). Partner A and his brother (Partner B) are 50-50% partners. Partner A effectively controls the partnership and its finances and Partner B is a passive investor.