Just when you thought the ink in the recent changes to the AICPA Code of Professional Conduct was about to dry, the AICPA Professional Ethics Executive Committee (PEEC) is on the move again.

Changes in the world economy, especially in the shrinking global marketplace, have made it all too evident that a lack of continuity exists in the application of accounting ethics around the world. Professional organizations in the respective countries that comprise global “sub-markets” have established their versions of ethics standards to require fair and consistent financial reporting from their members. The quandary that has arisen is how do these various ethics standards come together for practitioners around the world? How do CPA firms from international practice units arrive at a level of assurance that will allow for reliance on “attest” financial statements prepared by “cross border” professional accountants?

The solution can only be found in international ethics standards designed to promote practice efficiency in the new global marketplace.

Spearheading the resolution to these questions is the International Federation of Accountants (IFAC). IFAC was organized in 1977 with the obvious foresight of coming changes to worldwide financial reporting. The primary goal of IFAC since 1977 has been the establishment of global standards for auditing, quality control, accounting education, governmental accounting and last, but not least, ethics standards. The organization is comprised of more than 155 member organizations located throughout more than 120 countries and territories. This equates to a constituent membership of well over 2.5 million accountants. With such a widespread diversity of membership it is essential for the establishment of a common ground, a common ethics language that will be applicable and relied upon by all the organizations that represent IFAC membership. The AICPA is an integral voice in this membership.

CPAs will ask themselves: “Why should international ethics standards concern me… I only have domestic clientele in the United States?” In addition, with the majority of AICPA members being represented by sole practitioners and small firms, questions may also arise as to the practicability of small practitioners being subject to an international code of ethics standards.

The answer is straightforward according to the May 2008 Journal of Accountancy. “U.S. practitioners who operate solely within the U.S. are increasingly likely to be expected to meet requirements on par with those of the IFAC because under the IFAC’s Statement of Membership Obligations, member bodies (such as the AICPA) agree to use their best efforts to meet these obligations, among them to have standards of conduct that are not less stringent than IFAC.”

The AICPA is currently working on the convergence of U.S. ethical standards with those of IFAC. The overall final outcome of this convergence process remains to be seen; yet it should be obvious to practitioners that a generic version of worldwide ethics standards is in the works.

The IFAC ethics standards are all encompassing – they apply to all members whether in public or private practice, governmental employment or academia.

Over 100 standard-setting organizations have already adopted the current IFAC Code with the goal to promote efficiency in their members’ attest engagements and minimize any difficulties in the determination of ethics compliance between foreign CPA firms. Changes in the future of the accounting profession and ethics are certainly on the horizon.

For more information, log onto the IFAC website at www.ifac.org or the AICPA website at www.aicpa.org.

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