Overview: The American Institute of CPAs’ Code of Professional Conduct

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AICPA
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Located in Washington, D.C., Right Advisory LLC has provided business consulting services since 2008. Right Advisory LLC offers certified public accountants (CPAs) and finance professionals continuing education courses on topics such as accounting ethics. Right Advisory LLC is a member of the American Institute of CPAs.

In 2014, the American Institute of CPAs amended its Code of Professional Conduct. Its Professional Ethics Executive Committee restructured the standards to give individuals more clarity on each rule. The code was reformatted with similar subjects grouped under a single heading and with a conceptual framework designed to improve consistent enforcement of ethical standards.

The framework consists of two types, one catering to business and another to public practice. Both are structured like a flowchart. They follow four steps, identifying threats, evaluating threats, identifying safeguards, and evaluating safeguards. A professional would consider whether or not a potential threat complies with ethical standards and determine if it meets a level of acceptance that warrants continuation of services. Then he or she would develop safeguards that reduce or eliminate the risks. It is also acceptable to formulate safeguards that bring threats down to an acceptable level in order to provide services. Depending on the situation, a financial professional may discontinue services to comply with the Code of Professional Conduct.

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Challenges to Traditional Universities

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Right Advisory LLC
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Right Advisory LLC, a financial consulting firm in Washington, D.C., released an article recently by its president, Robert M. Tarola, entitled “Traditional Higher Education – A Challenged Value Proposition.” Tarola led a team from Right Advisory, LLC, that helped a major research university reorganize its financial structure, and he used the experience to write the paper, which identifies the major challenges that traditional universities face in the today’s changing world.

Tarola notes that traditional universities are under tremendous pressure to change because of rapidly evolving technology and a changing job market. Online education is becoming more popular, and there is less demand for brick-and-mortar universities than in the past. He points out that traditional universities often have a high proportion of tenured faculty (who can be compared to owners) relative to lecturers and other support professionals (who can be compared to workers), and the result is a top-heavy business model that isn’t always profitable.

Furthermore, Tarola observes that traditional universities often have difficulty demonstrating accountability for what happens with money, and this raises public skepticism as well as making potential investors leery. Additionally, traditional universities depend far too much on government funding – and the slow decision-making that goes with it – as well as on student tuition that leaves graduates saddled with debt for decades.

While Tarola identifies areas of concern for these universities, he believes that there is definitely hope for them. Rather than a “doom and gloom” piece, his paper serves as good reading for anyone interested in how academic institutions can meet the challenges of the 21st century. The paper can be read online at: http://www.rightadvisory.net/files/91025921.pdf

About the PCAOB’s Investor Advisory Group

At Right Advisory LLC, knowledgeable professionals support client companies in audit processes, governance, and general finance. Right Advisory LLC’s president currently serves on the investor advisory group of the Public Company Accounting Oversight Board (PCAOB).

Established by the United States government to oversee public company audits with the goal of protecting investors, the PCAOB created an investor advisory group to weigh in on important investor-related issues. The group consists of acknowledged experts in the field of investment and serves as a vehicle to inform the Board as a whole. This information becomes part of the policy development of the Board and is also a key factor in the decisions that appear in its annual report.

The investor advisory group, or IAG, consists of approximately 15 professionals who have repeatedly demonstrated a dedication to the interests of investors. Each individual must serve the organization as an independent entity to preserve objectivity. Members further agree to avoid influencing Board members or staff and to refrain from contributing in matters that represent a conflict of interest. Members meet annually or semi-annually or as the need arises.