I wrote a short post on The CPA Journey, as I had experienced it, about six months ago on August 8, 2011.   My mind wandered there probably because I had taken my last CPA test a little over a week before that, on July 30.   Just 21 days later, on August 27, I married my wife, Jamie Lee.

In that blog post, I talked about the four exams that were required to be completed prior to applying to become a Certified Public Accountant.   Those are viewed as the final hurdle before obtaining the CPA.   For many intentions, this is the case.   The stresses associated with the whole journey are pretty much relieved after passing the last of the four tests.

The final exam is not one that you will find riddled with debits and credits; rather this final exam attempts to filter the remaining candidates who understand the ethics of public accounting.   Anyone who has made it to this point in the testing surely would be able to pass this “open-book” exam, and this exam unfortunately will not deter those in pursuit of the certification with malicious intent.   There are checks and balances to prevent those individuals from causing too much harm to society, although, just as in anything else, some do manage to beat the system.

For those of us, in the vast majority, taking this ethics exam seems a redundant task.   Upon successful completion, however, I can say that the exam addressed situations that I may not have paid too close attention to before, or stressed the importance of other situations that are important enough to reiterate.

A main purpose of public accounting is to attest to the accuracy of financial information provided by companies.   Stakeholders use that information to approve loans or make investment decisions.   A topic largely addressed in the ethics examination is the idea of independence, both in practice, and appearance.   Someone who works for a company can not audit the financials, or attest to their accuracy.   It seems like a “no-brainer”.   There are sticky situations however, such as the case where a family member works for the company you are auditing.

Another important ethical area of public accounting addressed in the ethics examination is the topic of client confidentiality.   Certified Public Accountants do not hat the same privilege as attorney-client privilege, although the privilege of information between CPA and client is nearly as strong.   The only time that privilege may be broken is through the consent of the client, or through the due process of law.

A lot of situations were addressed in the exam, but there is no way that every situation could be addressed.   The exam served as a good launch pad for how to handle difficult situations.   What I believed to be a redundant task going in, I now believe to be a very important step to becoming a CPA.

Kevin