Category: Ethics

A Global Standard for Professional Ethics

Cross-Border Business Concerns

July 2008

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If you were traveling on business to Mexico City for the first time, you'd be wise to research the local currency, laws and business etiquette. Similarly, if your audit client operates a major subsidiary in Mexico and your audit report will be relied upon by users of the client's financial statements in Mexico, you need a working knowledge of international professional standards. You should know about the accounting, auditing, ethics and quality control standards that affect the engagement and your accounting practice.

While all of these professional standards are critically important, this article focuses on the international ethics standards-including auditor independence-promulgated by the International Federation of Accountants (IFAC) and how U.S. practitioners may be affected by them. (Co-author Robert Bunting is deputy president of IFAC.) The visibility of the IFAC Code of Ethics for Professional Accountants in the U.S. has grown in recent years as business has become increasingly global and as the AICPA has begun the process of converging its Code of Professional Conduct with the IFAC guidance. If you think global ethics rules are irrelevant for your practice, you may be surprised to learn that CPA firms of all sizes are being asked to confirm their compliance with global standards.