Texas State Board of Public AccountancyMeeting Education Requirements for the

Uniform CPA Examination

Mary B. Curtis

State of Texas Administrative CodeTitle 22, Part 22, Chapter 511, Subchapter C, Rule 511.58

• the board requires that 3 passing semester hours be earned as a result of taking a course in ethics.

• The course must be taken at a recognized educational institution and should provide students with a framework of ethical reasoning, professional values and attitudes for exercising professional skepticism and other behavior that is in the best interest of the public and profession.

• The ethics program should provide a foundation for ethical reasoning and include the core values of integrity, objectivity and independence

• taught by an instructor who has not been disciplined by the board for a violation of the board's rules of professional conduct unless waived by the board.

Approved Ethics CoursesAn approved ethics course will be included on the list on the Board's webpage along with the name of the instructor for the course. Instructors are expected to:• Teach from and adhere to the syllabus and class schedule that is accepted by

the Texas State Board of Public Accountancy.• Provide students with a framework of ethical reasoning, professional values

and attitudes for exercising professional skepticism and other behavior that is in the best interest of the public and profession.

• Provide students with a foundation for ethical reasoning that includes the core values of integrity, objectivity, and independence.

• Conduct the class in a professional and ethical manner that models behavior that students may be expected to display as a professional accountant.

• Provide guidance to students concerning the ethical rules and regulations of the Board and/or the CPA regulatory agency in the state, as well as national regulatory and professional accounting organizations.

• Adhere to the statutory requirements of the Public Accountancy Act and the Board's Rules of Professional Conduct, as well as all other rules promulgated by the Board.

Ethics Courses Requirements

• The course should provide students with a framework of ethical reasoning, professional values and attitudes for exercising professional skepticism and other behavior that is in the best interest of the public and profession.

• The course should provide a foundation for ethical reasoning and include the core values of integrity, objectivity, and independence.

An ethics course should cover the following topics:

• Theory of ethics - 70% of the course, at a minimum, is similar to any ethics course, in addressing

• Ethical theory - 10%• Ethical reasoning - 15%• Values

• Integrity - 15%• Objectivity - 15%• Other core values - 15%

• Accounting specific - 25% should be specific to an ethics course in accounting

• Independence (as it pertains to accounting) - 15%• AICPA, SEC, and the Board of Accountancy's ethics rules - 10%

• Other topics - 5%

How we meet the course requirements:

• To address these topics we have used Moral Leadership and Ethical Decision Making, by Cherrington and Cherrington, CHC Forecast, Inc., 2000, as our textbook.

• As this focuses on business, but not accounting, we supplement with numerous additional sources. State says “Topical coverage should incorporate a majority of accounting case studies and moral dilemmas supplemented by business and general case studies and moral dilemmas.”

Theory of Ethics (70%) - Focus of this coverage has been on three dimensions:

• Moral Awareness – knowing when you are facing an ethical dilemma and recognizing the ethical dimensions of any situation

• Moral Decision-making – knowing how to identify the appropriate course of actions

• Moral Motivation – choosing the right actions even when it is difficult

• Values play a role in all dimensions, such as:• Integrity, Objectivity, Independence• Moral character• Moral leadership

• Thus, I both begin the semester having the students write their Statement of Personal Moral Principles and have them update this statement at the end of the semester

Ethical Dilemma Resolution Framework1. Determine the facts and identify the ethical dilemma

involved2. Determine the affected parties and identify their rights3. Determine the party with the most important rights 4. Identify the applicable laws or code of conduct rules5. Develop alternative courses of action6. Determine the possible consequences of each

proposed course of action and estimate their likelihood7. Decide which course of action best upholds your

personal values and defend your selection

Ethics in the accounting profession (25%):

• Independence (as it pertains to accounting) • AICPA, SEC, SOX, Dodd-Frank• Texas Board of Accountancy's ethics rules

• I also cover corporate codes of conduct here, having students compare the codes of two companies in the same industry

Other topics (5%): Dealing with moral failure

• Others’ failure – whistleblowing• Your own failure – taking responsibility, apologizing

Weakness in this approach – implementing chosen solution

Giving Voice to Values - Rather than a focus on ethical analysis, this curriculum focuses on ethical implementation and asks the question: “What if I were going to act on my values? What would I say and do? How could I be most effective?”

GVV starts at: “What if you were going to act on your values? What would you do and say?” And then focuses on the tools for doing so.

Online, six modules – students then write up how they will use the GVV materials to implement their EDRF case

Summary of Course Grade:Course activities carry the following weights:

EDRF Case 50GVV Case 25In-Class Activities 40Class Participation 35Examinations 200

Attendance is required, participation is required, each week’s case(s) must be written up and turned in at the beginning of class

Exams are a combination of multiple choice and discussion. Example:Which system of social justice most resembles how health insurance is

used?a. Equalityb. Equityc. Need-basedd. Majority votee. Specialized expertise

Support:

Links for related rules and documents:

• http://texreg.sos.state.tx.us/public/readtac$ext.TacPage?sl=R&app=9&p_dir=&p_rloc=&p_tloc=&p_ploc=&pg=1&p_tac=&ti=22&pt=22&ch=511&rl=58

• http://www.tsbpa.state.tx.us/education/ethic-course-requirements.html

Thank you.

An ethics course should cover the following topics:• Ethical reasoning - 15%• Integrity - 15%• Objectivity - 15%• Independence (as it pertains to accounting) - 15%• Other core values - 15%• AICPA, SEC, and the Board of Accountancy's ethics rules - 10%• Ethical theory - 10%• Other topics - 5%

An ethics course should cover the following topics:• Ethical reasoning - 15%• Integrity - 15%• Objectivity - 15%• Independence (as it pertains to accounting) - 15%• Other core values - 15%• AICPA, SEC, and the Board of Accountancy's ethics rules - 10%• Ethical theory - 10%• Other topics - 5%