THE FOLLOWING LEGAL STUDY ARTICLE POSTING IS INTENDED TO SUPPORT AWARENESS AND UNDERSTANDING. IT IS ONLY A PRELIMINARY LEVEL LEGAL STUDY ARTICLE AND IT IS NOT LEGAL ADVICE. IF THE READER SEEKS LEGAL ADVICE CONCERNING HIS OR HER PARTICULAR SITUATION, HE OR SHE SHOULD SEEK OUT AN ATTORNEY IN A LAWYER CLIENT RELATIONSHIP.
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Subordination of Professional Judgment May Arise When a Professional Provides Client Services for Several Members of a Family Whom the Professional Knows to Have Opposing Interests.
(All Citation References Herein Are To The AICPA Code Of Professional Conduct)
A. In providing professional services, professionals should protect the integrity of their work, maintain objectivity , be free of conflicts of interest, and shall not knowingly misrepresent facts or subordinate their judgment to others.
See ET § 0.300.050.03 …..Regardless of service or capacity, members should protect the integrity of their work, maintain objectivity, and avoid any subordination of their judgment.
See ET § 1.100.001.01
In the performance of any professional service, a member shall maintain objectivity and integrity, shall be free of conflicts of interest, and shall not knowingly misrepresent facts or subordinate his or her judgment to others. [Prior reference: paragraph .01 of ET section 102]
B. Those who rely on professionals expect them to discharge their responsibilities with integrity and objectivity.
See ET § 0.300.030.04
Those who rely on members expect them to discharge their responsibilities with integrity, and objectivity…..
C. Integrity is an element of character fundamental to professional recognition. It is the quality from which the public trust derives and the benchmark against which a professional must ultimately test all decisions. Integrity requires a professional, among other things , to observe the principle of objectivity .
See ET § 0.300.040.02
Integrity is an element of character fundamental to professional recognition. It is the quality from which the public trust derives and the benchmark against which a member must ultimately test all decisions.
See ET § 0.300.040.05
Integrity also requires a member to observe the principles of objectivity…. [Prior reference: ET section 54]
D. Integrity requires a professional to be, among other things, honest and candid within the constraints of client confidentiality. Service and the public trust should not be subordinated to personal gain and advantage. Integrity can accommodate the inadvertent error and honest difference of opinion; it cannot accommodate deceit or subordination of principle.
See ET § 0.300.040.03
Integrity requires a member to be, among other things, honest and candid within the constraints of client confidentiality. Service and the public trust should not be subordinated to personal gain and advantage. Integrity can accommodate the inadvertent error and honest difference of opinion; it cannot accommodate deceit or subordination of principle
See ET § 0.300.070.02
…. Integrity requires that service and the public trust not be subordinated to personal gain and advantage.
E. Objectivity is a distinguishing feature of a professional. The principle of objectivity imposes the obligation on a professional to be impartial, intellectually honest, and free of conflicts of interest in discharging professional responsibilities.
See ET § 0.300.050.02
Objectivity is a state of mind, a quality that lends value to a member’s services. It is a distinguishing feature of the profession. The principle of objectivity imposes the obligation to be impartial, intellectually honest, and free of conflicts of interest. ……
See ET § 0.300.050.01
… A member should maintain objectivity and be free of conflicts of interest in discharging professional responsibilities…
See ET § 0.300.070.02
. Objectivity …requires that members be free from conflicts of interest in discharging professional responsibilities. …
F. Threats to a professional’s compliance with integrity and objectivity standards may be created when a professional provides a professional service related to a particular matter involving two or more clients whose interests with respect to that matter are in conflict, or the interests of the professional with respect to a particular matter and the interests of the client for whom the professional provides a service related to that matter are in conflict.
See ET § 1.100.001.
For example, threats may be created when
a. the member…provides a professional service related to a particular matter involving two or more clients whose interests with respect to that matter are in conflict, or
b. the interests of the member ….with respect to a particular matter and the interests of the client for whom the member …..provides a professional service related to that matter are in conflict.
G. Conflicts of interest creating adverse interest and self interest threats to professional objectivity and integrity may arise when a professional provides tax or financial planning for several members of a family whom the member knows to have opposing interests. Integrity and objectivity standards prohibit a professional from knowingly misrepresenting facts or subordinating his or her judgment when performing professional services for a client.
See ET § 1.100.001.04
The following are examples of situations in which conflicts of interest may arise:
- Providing tax or personal financial planning services for several members of a family whom the member knows to have opposing interests
See ET § 1.110.010.02
A conflict of interest creates adverse interest and self-interest threats to the member’s compliance with the “Integrity and Objectivity Rule”
See ET § 1.130.020.01
The “Integrity and Objectivity Rule” [1.100.001] prohibits a member from knowingly misrepresenting facts or subordinating his or her judgment when performing professional services for a client, …..,
H. Subordination of the integrity and objectivity implicit to professional judgment may arise when a professional provides services for several members of a family whom the professional knows to have opposing interests. In such cases , the professional should decline to perform or discontinue the professional services that would result in the conflict of interest; terminate the relevant relationships or dispose of the relevant interests to eliminate the threat or reduce it to an acceptable level.
See ET § 1.000.010.02
The code specifies that in some circumstances no safeguards can reduce a threat to an acceptable level . For example, the code specifies that a member may not subordinate the member’s professional judgment to others without violating the “ Integrity and Objectivity Rule” [1.100.001].
See ET § 1.100.001.11
In cases where an identified threat may be so significant that no safeguards will eliminate the threat or reduce it to an acceptable level,…. , the member should ( a ) decline to perform or discontinue the professional services that would result in the conflict of interest; or (b) terminate the relevant relationships or dispose of the relevant interests to eliminate the threat or reduce it to an acceptable level
See ET § 1.130.020.09
If the member concludes that no safeguards can eliminate or reduce the threats to an acceptable level …., then he or she should consider the continuing relationship….and take appropriate steps to eliminate his or her exposure to subordination of judgment
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