Regulatory Enforcement of Accounting Ethics in Puerto Rico
- PDF / 823,531 Bytes
- 14 Pages / 595.276 x 790.866 pts Page_size
- 31 Downloads / 328 Views
ORIGINAL PAPER
Regulatory Enforcement of Accounting Ethics in Puerto Rico Rogelio J. Cardona1 · Zabihollah Rezaee2 · Wanda Rivera‑Ortiz1 · José C. Vega‑Vilca1 Received: 11 September 2018 / Accepted: 22 February 2019 © Springer Nature B.V. 2019
Abstract This paper examines ethical violations committed by Certified Public Accountants (CPAs) in Puerto Rico (PR) in the 2002–2010 period and the related disciplinary actions taken by the local regulatory bodies. The institutional settings for the accounting profession in PR are different from those of the United States. Ethical complaints are investigated by the PR Society of CPAs and evaluated based on the Code of Professional Conduct of the American Institute of Certified Public Accountants (AICPA), although most CPAs in PR are not affiliated with the AICPA. Our study is based on data provided by the PR Society of CPAs that is not publicly available. We examine the association between the occurrence of the ethical violations and certain variables such as gender, type of practice performed by the CPA, and whether the CPA participates in a peer review program. Results of a multiple correspondence analysis (MCA) suggest that not being a member of the AICPA, practicing as a sole practitioner, and not participating in a peer review program seem to be more associated with the occurrences of ethical violations by CPAs. We compare our findings with prior research on ethical infractions committed by CPAs in the United States and find some differences attributable to the institutional settings in PR. Overall, our results suggest the importance of codes of conduct in the accounting profession and compliance with such ethical guidelines by practicing accountants. Keywords Accounting ethics · Ethical violations of CPAs · AICPA Code of Professional Conduct · The accounting profession
Introduction Ethical violations committed by Certified Public Accountants (CPAs) and the sanctions imposed on them have been studied extensively. However, state CPA societies, the American Institute of Certified Public Accountants (AICPA) and the Public Company Accounting Oversight Board (PCAOB), continue to deal with disciplinary actions for ethical violations. Financial scandals by high-profile companies (Enron, * Rogelio J. Cardona [email protected] Zabihollah Rezaee [email protected] Wanda Rivera‑Ortiz [email protected] José C. Vega‑Vilca [email protected] 1
School of Business Administration, University of Puerto Rico-Rio Piedras, San Juan, PR, USA
University of Memphis, Memphis, TN, USA
2
Global Crossing, Adelphia, Qwest, WorldCom, Parmalat, and Satyam), related global ethical debacles, and the failure of practicing CPAs to discover and prevent them have eroded investor confidence and public trust in financial reporting and audit reports within the past two decades (Hogan et al. 2008; Trompeter et al. 2013). These scandals have reinvigorated interest in the ethical considerations of corporations and their auditors. Business failures often coincide with audit failures that ca
Data Loading...
