Ethical Differences Between Enrolled Agents and Certified Public Accountants (Essay Sample)

Ethical issues for accountants
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Introduction.
Accountants in their line of work usually encounter ethical issues when undertaking financial responsibilities both for individuals, government entities or companies. Regardless of the industry accountants ought to be intensively vigilant so as to limit outside forces that may manipulate financial records that lead to criminal and ethical violations. In the recent past, we have been witnessing in the news highly publicized accounting scandals. These scandals show most of the accountants are not meeting standards of conduct inherent in the profession. Thus, making the subject of ethical issues regarding accountants very sensitive and controversial. To that end, this paper is going to focus on tax preparation, ethical differences between enrolled agents and Certified Public Accountants. The paper will also examine the standards that the AICPA holds accountants to as well as ethical issues facing accountants that are being raised in the media.
Tax preparers are subjected to a variety of standards and ethics guidelines from various bodies such as the Internal Revenue Code, AIPA tax ethics, state licensing boards, Professional Association, circular 230 and other regulatory bodies. Ethics for enrolled agents are different from Ethics of Certified Public Accountants (CPA). Despite the fact that both enrolled agents and CPAs have unlimited represented rights before the IRS, they tend to have varying ethical requirements as tax preparers. Enrolled agents first and foremost are federally authorized tax practitioners who are licensed by IRS. CPAs, on the other hand, are licensed by the state boards of accountancy and U.S territories. Both Enrolled agents and CPAs are subjected to IRS oversight. However, the amount and type of regulations depends on various factors. For instance, CPAs ethical codes are regulated by their state licensing boards. CPAs ought to meet good codes of conduct and standard requirements provided by their boards of accountancy and other professional organizations. Moreover, if the practice before the Internal Revenue Service they are subjected to the provisions of the Circular 230. On the other hand, enrolled agents are entirely subject to the provisions of Circular 230. Enrolled agents ought to pass an examination satisfying that they qualify to be enrolled. They have to adhere to standards of practice present in part 10 of Title 31 of the Code of Federal Regulations found in Circular 230. Enrolled agents who violate these standards are subjected to various disciplinary sanctions including censure, reprimand, and disbarment from practice or suspension.
With over 400,000 Accountants, AICPA represents its members nationally regarding setting standards, making rules and serving as an advocate for public interest groups, legal bodies, and other special groups. The AICPA plays a massive role in setting professional standards for professional accountants. Accountants have to uphold standards that provide them with guidance and rules in their performance of their professional duties. Accountants ought to adopt and abide by codes of professional standards provided by the AICPA in providing financial services and guidelines to industries, governments and individual’s entities (Griff, 2014). These standards include principles and rules, in which principles provide the framework for the rules that govern the performance of their professional, responsibilities. Standards outlined by the AICPA includes:
Compilation and review Standards
Complication and Review Standards provide accountants with means of performing and reporting on review for private entities. These standards make it possible for CPAs through complication services to develop financial statements for private and small entities. After compiling the financial statements, accountants can review financial statements by making inquiries on financial statement related issues as recordkeeping, accounting policies as well as changes in business activities. Thus, through compilation and reviews standards accountants are better positioned to apply analytical procedures that can identify trends that are unusual in a financial statement and require explanation (Cohn, 2014).
Continuing Professional Education (CPE) Programs Standards
The AICPA provides these standards for accountants who are continuing with education programs. Accountants require continuing professional education so that they can uphold their professional competence as well as providing excellent professional services to their clients. Thus, accountants must adhere to requirements in continuing education programs provided by AICPA. These standards are subject to revision in every two years. AICPA accountants must also meet Continuing Professional Education Requirements that involve completing at least twelve Continuing Professional Education requirements in the three-year reporting time. The reporting period starts the calendar year after being AICPA member. Qualifying programs contributes to professional competence and confidence of the accountants.
Personal Financial Planning Standards
Personal Financial Standards establishes accountant’s duties of providing personal financial planning services such as retirement, investment, estate, insurance and tax planning. They also serve as authoritative guidelines to help accountants in delivery the above personal finance services. These standards are developed to ensure that accountants act with confidence and competence while delivering personal financial planning services. New, experienced and seasoned practitioners usually benefit from this standards since they all benefit from a structured framework that acts as a roadmap in devolving personal plans for their clients.
Standards for Consulting Services.
These are standards for CPAs who provide a wide range of consulting services to their clients such as in managerial and financial sectors. These standards are issued by the AICPA Management Consulting Services Executive Committee. These standards apply to all consulting services provided by accountants. The standards regulate professional competencies of accountants. These standards mandate that CPAs should undertake only those professional they can complete with professional Excellency. It also calls for due professional care that requires that CPAs offer professional services with due professional care. Lastly, planning and supervision, that entails that CPAs should do adequate planning and maximally supervise their professional consulting services.
Code of Professional Conduct standards
These are rules and guidance for AICPA accountants in various fields such as in public practice or government entities that they ought to follow while exercising their professional responsibilities. AICPA has established standards that are enforceable to all accountants. These standards ensure they act with due care, integrity, and competence, maintain confidentiality, and fully disclose any conflict of interest as well as offering serving the public with the best interest when provi...