Ethics CPE: Required, and then some

Effective Oct. 1, a new ethics training rule re-examines CPAs’ most fundamental trait

By Bill Sheridan
Statement Editor

Yes, it’s a requirement. But for Maryland CPAs, ethics-based training is much more than just another regulatory mandate.

According to MACPA ethics experts, it is an inspirational reminder of how important ethics and integrity are to the profession, especially in a post-Enron world.

Maryland's State Board of Public Accountancy last year enacted a new continuing professional education mandate that requires Maryland CPAs to devote at least four hours of CPE every two years to ethics training. The requirement will take effect on Oct. 1, meaning that four hours of ethics CPE will be required for license renewals beginning on Oct. 1.

“I’m a big proponent of this,” said Tom Lantz Sr., instructor for the MACPA course “Ethics: Approaches and Applications.” “Ethics is a word that everyone says, but many people may not have a full grasp of how critical it is to our profession. I think you are going to see an incredible emphasis on just how important ethics is, not only to the profession but to business in general.”

Lantz, a partner with HeimLantz Business and Tax Services and a member of the AICPA’s Professional Ethics Executive Committee (PEEC), teaches “Ethics: Approaches and Applications” with Frank Ryan. It is one of two public seminars offered by the MACPA to help CPAs comply with the new requirement. The other is “A Matter of Integrity: CPA Ethics and Leadership Today,” taught by Michael Daigneault, Esq.

Though they have always been vital to the profession, the concepts of ethics and integrity took a beating during recent accounting scandals and the resulting regulatory frenzy. Maryland’s ethics CPE requirement has put ethics back at center stage and forced the profession to re-examine one of the most fundamental parts of being a CPA.

“The public believes that CPAs should be honest and ethical, and any failure on our part to live up to that severely undermines the value of being a CPA,” said Ryan. “(The ethics CPE requirement) is a positive reinforcement and reminder of what we provide to the public.”

“Many of us have to go beyond the minimal requirements to be the best professionals we can be, and that requires more than just minimal attention to ethics,” Daigneault added. “It requires embracing ethics and accepting it as an essential, vital part of being good at what we do. There are some who might say, ‘I am technically competent, so I am a good CPA.’ That’s not true. You have to be both technically competent and ethical to be a good CPA.”

Equally important, the programs also review recent ethics rules and regulations surrounding issues like non-attest services, outsourcing and the like. In the age of Sarbanes-Oxley, said Daigneault, it’s not enough to think you know the regulations.

“Based on my experience, some CPAs are in a relatively dangerous place: They think they know the ethics rules and ethics code, but frequently they do not,” he said. “That’s sometimes worse than not knowing it at all.”

The prospect of complying with yet another regulation has left some CPAs unhappy, but the instructors say their students immediately see the benefit of the programs. The course evaluations bear them out, with ratings at or near the “excellent” level.

“Generally speaking, you can’t teach someone to be ethical,” said Ryan. “(The ethics requirement) is merely an opportunity to reinforce boundaries, and I think it’s pretty effective.

“Moreover, the public gets a reaffirmation from all CPAs that we are setting ourselves apart from others in the sense that ethics, objectivity and honest, faithful representation are the hallmarks of what we do. The entire underpinning of a free-market society is the ability to have faith and confidence in financial reporting. The minute that becomes undermined, the entire value of a free-market system is undermined as well. I really believe that. If we ever forget that, the value of being a CPA is completely diminished.”

Added Daigneault: “Our role and objectivity as CPAs is so important that the market has to ensure that we are ethical and have high integrity, or the system breaks down.”


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