Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Our responsibility as CPAs is to our clients, the shareholders

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Francine McKenna reposts one of her favorite discussions on the responsibility of CPAs: – Madoff, MLK, Buddha And Elusive Nature of Self-Interest

The core question is where do we place our ultimate focus and loyalty?

Management who hired us?  The CFO who could get us fired?  The board of directors? Senior partners of our firm?

No, no, no, and no.

It is the shareholders that are our real client. That is where our ultimate obligation goes.

For an NPO, it is a bit more difficult. It is not the CFO, Executive Director, or even the board of directors that we owe our responsibility.  Ultimately we owe our duty to the organization itself or their constituents, and if things are really fuzzy, maybe their mission or movement.  But we don’t owe our loyalty to the CFO or CEO.

Francine says:

Your first obligation as a professional is to your client, not your firm, your partners, or even your family. If your client is doing something illegal then it is to law enforcement. That may seem harsh, but it’s the code that’s supposed to insure that lawyers and accountants, for example don’t cut corners out of their own self-interest and to the detriment of their client’s interests.

If you’ve got a CPA certificate on the wall, that’s what you signed up for. She points out the Code of Professional Conduct says:

“By accepting membership, a certified public accountant assumes an obligation of self-discipline above and beyond the requirements of laws and regulations.

The Principles call for an unswerving commitment to honorable behavior, even at the sacrifice of personal advantage.

A distinguishing mark of a profession is acceptance of its responsibility to the public.

That basic concept should be enough to guide CPAs.  And yet we have all these rules in the Code of Professional Conduct.

Where then do our professional rules and regs enter in? Because not everyone catches the basic concept.  For them we need more.

Here’s the short version. She quotes MLK:

Martin Luther King Jr.: “Morality cannot be legislated, but behavior can be regulated. Judicial decrees may not change the heart, but they can restrain the heartless.”

Why all the rules and regs?  She says

Regulate the immoral. Restrain the heartless.

Our aspirational goal, or standard, or expectation, is to serve the real client. The absolute minimum of allowed behavior is all those rules and regs.

If your focus is to meet the minimum standards, you are missing the point of being a professional.

Read the full post. It’s great.

Written by Jim Ulvog

January 16, 2012, 11:19 am at 11:19 am

2 Responses

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  1. […] A few weeks ago, I described a great post by Francine McKenna that reminded us CPAs in public practice that our responsibility as a CPA is to the real client, not the person that hired you.  Her post is at Madoff, MLK, Buddha And Elusive Nature of Self-Interest  My discussion is here. […]

  2. […] Our responsibility as CPAs is to our clients, the shareholders […]


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