Changes in the code of ethics of the U.S. accounting profession, 1917 and 1988: The continual quest for legitimation

Ethics and auditing: Setting the bar too low

“…The 17 clauses cover a range of requirements, including: the overall characteristics of professional accountants (clause 1-2), confidentiality (clause 3), disclosure of conflict of interests (clause 4), relationship with other accountants and the profession (clause 5-9), advertising (clause 10), obligation to stakeholders (clause 11), unbiased judgement (clause 12), no commission dealing (clause 13), obligations to the profession and the Society (clause 14-17). As Preston et al(1995) found in the 1917 American Association of Public Accountants code of ethics there were similar prohibitions against encroachment and advertising. According to Preston et al (1995) the term independence was not used until 1964, rather the emphasis is "replete with exhortations of duty, responsibility and loyalty" (p. 513).…”

“…As Preston et al(1995) found in the 1917 American Association of Public Accountants code of ethics there were similar prohibitions against encroachment and advertising. According to Preston et al (1995) the term independence was not used until 1964, rather the emphasis is "replete with exhortations of duty, responsibility and loyalty" (p. 513). They argue such ethics reflect contemporary conceptualisations of morality and societal culture to legitimise the profession within a wider public domain.…”

“…The 2003 COE adopts a more teleological approach with emphasis on legitimising the accounting profession. Preston et al (1995) observe that originally accounting like medicine and law was to be regarded as an occupation more heavily influenced by the service motive than entirely by the profit motive. As suggested by Higgins & Olson (1972), accounting involves judgement and the acceptance of responsibility to others.…”

“…Putting, originally, a focus on character means as Preston et al (1995) observe that the profession's foundations rest on moral schema and code of ethics rather than standardisation and regulation. The paper attempts to show how the NZ COE has shifted from a focus on character to a more functionalist model which protects clients by delivering expert services.…”

Opportunities and Problems of Standardized Ethics Initiatives – a Stakeholder Theory Perspective

“…First, contrary to standards that are supposed to be applicable across time and space (viz. by different firms in different sectors/countries at different times), codes of conduct are firm-specific and thus not generalizable across organizations (Leipziger, 2003;Lozano, 2001;O'Dwyer and Madden, 2006;Preston et al, 1995). Second, standards can, but do not have to, demand third-party certification from implementing companies, while most codes of conduct either offer no monitoring mechanisms at all, or, if such a mechanism is in place, the monitoring is limited to an internal self-observation by the firm (Tulder and Kolk, 2001).…”