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Running head: OBJECTIVITY AND INDEPENDENCE 1
AICPA Professional Code of Conduct: Objectivity and Independence
Joe R. Estrada
Liberty University
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Sharon, I agree that accountant’s objectivity, free of conflict and moral ethics are virtues
all must have in the profession so that one can focus on the action rather than the outcome.
Excellent choice of scripture, 2 Peter 1:5-7, for one to fill him/her with “Godliness/Christ-like
virtues” will certainly help in making tough moral decisions. Allow me if I may, to reiterate what
you have so well-articulated, and add to your paper some of my understanding as well.
AICPA professional code of conduct: Principle IV is on objectivity and independence.
The principle states, “A member should maintain objectivity and be free of conflicts of
interest in discharging professional responsibilities”, and “A member in public practice should be
independent in fact and appearance when providing auditing and other attestation services”
(Duska, Duska & Ragatz, 2011).
Principle IV Defined
The first principle of independence and objectivity is impartiality. For the CPA to be
independent and objective, they need to act based on facts and evidence, not on a hunch or any
other influence (Whittington & Delaney, 2013). Furthermore, impartiality requires strict
adherence to the law without deviation or interferences. The second principle is the prohibition
of unwarranted interference that can either be internal or external. Interferences can come
internally for an audit firm such as influenced by the management or colleagues due to specific
reasons. The interferences can also be external or outside especially from the client as they may
want to influence the accounting information in a particular way that is not an accurate
representation of the actuals. The third principle is free from conflict of interests. Meaning,
conflict of interests is such as those relationships with the client which compromises on
independence and objectivity of the CPA to perform their job duties. Lastly is relevance and
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reliability, which constitute the principle of objectivity. Relevance concept in accounting
standards allows for predictive value, feedback value in representing financial statements
(Carmichael & Graham, 2012). Reliability concept demands the verification of financial
information by various evidentiary sources.
Accounting and Deontology Ethics
The Christian worldview is based on God and the Bible where values are absolute, and
relativism is condemned. According to Christians, Christian morals are objective as they are
reflective of what everyone would consider right or wrong. For instance, lying is wrong, both in
the Christian ethics and in accounting and this is neither disputable nor debatable. Lying is an
absolute that is agreeable with everyone or universal, thus taken to be objective. Christian ethics
promote independence in decision-making. Independence means the individual should be free
from interference that may cause them to sin or do what is morally wrong. In Christianity,
interference is exhibited in various forms such as temptations, peer pressure, and pleasures of the
world. In accounting, interference is exhibited in the form of relationships, management
interference, and favors. Freedom from all these interferences and acting independently of
influences constitutes moral acts.
The deontological view is almost similar to the Christian view as they both consist of
absolutes. In deontological-based ethics, duty, obligations, and laws in their decision-making
bind humans. Accounting profession requires accountants to be independent and objective as this
is the right thing to do. It is a requirement for the accountant to be objective or independent
despite the outcomes. For instance, an accountant is given truthful information by a relative who
works with the client but decides to discard the information to maintain his/her independence.
Refusal to use the information leads to the financial misrepresentation that could be avoided in
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using the additional information from the relative. In deontological ethics, the accountant acted
morally and also the accounting profession required the accountant to behave that way despite
the outcome.
Accounting code of professional conduct allows for inadvertent error (Mintz, 2014) and
this is a typical example. Therefore, both the principle of objectivity and independence and
deontological ethics require the individual to focus on duty and not outcome. Further, according
to DiGabriele & Ojo (2014) “integrity, objectivity, and independence constitute vital principles –
in respect of ethical principles which are considered to be essential to the exercise and conduct of
the external and internal audit function” (p.203).
Biblical Perspective
At the point when the time comes when an accountant has to access a client, his/she must
be objective and impartial. The same holds true when performing an audit for clients. The Bible
plainly instructs that we are to maintain a strategic distance from partially. Romans 2:11 clearly
states, “For God does not show favoritism” (NIV).
According to the following scriptures “Thus you will walk in the ways of the good and
keep to the paths of the righteous.21 for the upright will live in the land, and the blameless will
remain in it;” (Proverbs 2:20-21, NIV). To expel subjectivity from one’s essential leadership
decision-making, one must have to set up clear documented objectives for each job. Decide
ahead of time what results will be viewed as exceptional, acceptable, or unsatisfactory. Convey
the necessary preconditions to your management staff, and ensure that they understand the
objectivity system put in place. Measure each colleague's objectivity utilizing the new system to
make they are following what is right. Conclusion
Individuals or CPA that are independent and objective are free from conflict of interest,
provide reliable and relevant information and are impartial. Christian ethics and deontology-
based ethics promote independence and objectivity as absolutes that should be adhered in the
accounting profession irrespective of the outcomes.
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References
Carmichael, D., & Graham, L. (2012). Accountants' Handbook, Financial Accounting and
General Topics. Hoboken: John Wiley & Sons.
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DiGabriele, J. A., & Ojo M. (2014). Objectivity and Independence: The Dual Roles of External
Auditors. Journal of Forensic & Investigative Accounting, (6)2, p.200-224. Retrieved
from: http://web.nacva.com/JFIA/Issues/JFIA-2014-2_6.pdf
Duska, R., Duska, B., & Ragatz, J. (2011). Accounting ethics (2nd ed.). Malden, MA: Wiley-
Blackwell a John Wiley & Sons, Ltd., Publication.
Mintz, S. (2014). Accounting for the Public Interest: Perspectives on Accountability,
Professionalism and Role in Society. Dordrecht: Springer Netherlands.
Whittington, O., & Delaney, P. (2013). Wiley cpa examination review, outlines and study guides.
Hoboken, N.J.: Wiley.
