Objectivity, Integrity and Disclosure
Under the AICPA Code of Professional Conduct, in the performance of any professional service, a member must maintain objectivity and integrity, shall be free of conflicts of interest, and shall not knowingly misrepresent facts.
A conflict of interest may occur if a member performs a professional service for a client and the member or his or her firm has a relationship with another person, entity, product or service that could, in the member’s professional judgment, be viewed by the client or other appropriate parties as impairing the member’s objectivity. The following are some examples (not intended to be all-inclusive) of relationships that could be viewed as impairing the member’s objectivity:
- In connection with a personal financial planning (PFP) engagement, an accountant plans to suggest that the client invest in a business in which the accountant has a financial interest.
- An accountant has provided tax or PFP services for a married couple who are undergoing a divorce, and the accountant has been asked to provide the services for both parties during the divorce proceedings.
- A member refers a PFP or tax client to an insurance broker or other service provider, which refers clients to the accountant under an exclusive arrangement to do so.
If you are involved in a conflict of interest situation—or even potential conflict of interest situation—you must disclose the conflict or potential conflict to your clients who are affected and obtain their consent.
Review the AICPA Code of Professional Conduct for more information.