1. as the process would simply become another

1. The accounting profession has a need for a code of
conduct because of the unique ways it differs from many other professions.  If accounting work was performed to the same ethical
standard as law, for example, it would lose most of its value.  Many lawyers have a financial motive behind
their work, and objectivity is not required of them.  If a lawyer chooses to represent a client,
their job is not to provide an independent and objective perspective, it is to
obtain a ruling in the client’s favor. 
If accountants followed this same methodology, the validity and
trustworthiness of financial statements and audits would be compromised, which
would lead to a devaluation of the entire profession in the eyes of investors,
firms, and the general public.

5. The effects on capital markets would be dramatic and
far-reaching.  Auditors act as a control
mechanism to further ensure the reliability of financial reporting.  Without independence, objectivity, and integrity,
auditors could be persuaded by business interests to fabricate financial
figures and form their analyses with the goal of promoting firms and covering
up any wrongdoing.  The general public
and the business community would then have no need for auditing, as the process
would simply become another means firms could use to make themselves appear
favorably to outsiders.  Investors would
also have to question the accuracy of financial records and public releases,
the uncertainty of which would disincentivize investing by globally increasing
the inherent risk of placing trust in any firm. 
The economic result of this would similar to a recession or depression,
where all investment, trading, and exchange of assets would be stymied on a
large scale.

7. The main distinction between parts 1 and 2 of the AICPA Code
of Professional Conduct is the need for independence.  Objectivity, integrity, and most other expected
professional standards are still required of CPAs working for businesses, but because
employees aren’t capable of being independent of their employer, nor needed to
be, this particular rule differs.  Business
accountants have many roles to live up to – they must simultaneously comply
with the law and accounting standards as citizens and accountants, and promote
the interests of a business as employees.  Despite the lack of their need for
independence, though, a business accountant still has to fulfill their ethical
obligations, in some cases necessitating the quitting of a job to eliminate a
threat of ethical breach.  

8. No, because there is a stipulation for this situation from
the AICPA in the rule prohibiting disclosure of confidential information.  The rule is not supposed to relieve an AICPA
member from complying with subpoenas or summonses, or from following relevant
government laws and regulations.  If complying
with federal and state law in court proceedings forced an accountant to lose
their membership, then accountants would be compelled to break the law to
maintain their status, which would put the profession at risk for legal
punishment.

9. One method that has been used is for the client to first
hire an attorney, then instruct the attorney to hire an accountant as a
sub-contractor (Wood, 2012).  Because the
accountant only works directly for the attorney, their work is subject to
attorney-client privilege.  A number of IRS
lawsuits have been counteracting this technique, though, with disclosure of
communications between the attorney and client being demanded by courts.  The result of this is that accountants’ ability
to invoke confidentiality in legal proceedings is almost nonexistent compared
to attorneys’.

10. A CPA could possibly charge a contingency fee is this
case because energy consulting is not one of the specified services included in
the relevant AICPA rule.  Energy consulting
is not auditing nor reviewing of a financial statement, nor tax
preparation.  Since this work could be
performed by a non-CPA, it may be exempt from the contingency fee rule.  However, this is a service which could
undermine the CPA’s objectivity, and if the CPA also provided auditing
services, their independence.  Since the CPA
would be a business employee in this case, their independence is not required,
but nonetheless, the value of any auditing work would be discredited in the
view of many by this arrangement.

11. No, because their role as an expert witness would be
strongly discredited by this arrangement. 
They would have no objectivity due to the possible financial reward in
their favor gained by procuring a specific ruling.  The AICPA has issued a publication which
addresses this specific issue in 2009 stating that “Contingent fees
arrangements are almost never acceptable for an expert witness,” that “a
contingent fee creates the appearance that the expert witness lacks objectivity
because fees are potentially dependent on the favorable testimony of the expert
,” and that “it is advisable for the practitioner to collect any outstanding
balances prior to expert testimony to avoid unintentionally creating a
contingent fee arrangement, or the perception of one” (Bays, 2015).  The accountant’s duty to the reputation of
the entire profession is also at stake here, because the more often this
potential arrangement would be made, the more likely it would become that CPAs
would be seen as unreliable witnesses motivated primarily by interest in
financial compensation.  Considering the
categorical imperative, all accountants’ livelihood would be less reputable. The
AICPA’s rule against committing acts discreditable to the profession would also
be broken.

12. Matthew Gamsey of New York, NY, working as Vice
President and Director of Accounting at Bankrate, Inc. between 2012 and 2015, had
his AICPA membership suspended for three years beginning in August of 2017 for
SEC violations (Fields, 2017).  He violated
federal securities laws and worked to overstate revenues while underreporting
expenses for the purpose of achieving Bankrate’s financial goals, resulting in
the overstatement of financial performance in 2012.  The interpretation of the AICPA rule regarding
acts discreditable to the profession includes the failure to comply with laws
and regulations.  The AICPA’s rule of
Compliance with Standards, including the Public Company Accounting Oversight
Board (PCAOB) was violated as well, as PCAOB’s rule 102, on Integrity and
Objectivity, was broken.  In particular,
section 102- prohibits making “knowing misrepresentations in the preparation of
financial statements or records” (ET Section 102, 2003). Since business accountants
are not exempt from the requirement to comply with all standards boards’
issuances, Gamsey temporarily lost his membership and his case became a matter
of public record.