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Regulatory Enforcement of Accounting Ethics in Puerto Rico

Author

Listed:
  • Rogelio J. Cardona

    (University of Puerto Rico-Rio Piedras)

  • Zabihollah Rezaee

    (University of Memphis)

  • Wanda Rivera-Ortiz

    (University of Puerto Rico-Rio Piedras)

  • José C. Vega-Vilca

    (University of Puerto Rico-Rio Piedras)

Abstract

This paper examines ethical violations committed by Certified Public Accountants (CPAs) in Puerto Rico (PR) in the 2002–2010 period and the related disciplinary actions taken by the local regulatory bodies. The institutional settings for the accounting profession in PR are different from those of the United States. Ethical complaints are investigated by the PR Society of CPAs and evaluated based on the Code of Professional Conduct of the American Institute of Certified Public Accountants (AICPA), although most CPAs in PR are not affiliated with the AICPA. Our study is based on data provided by the PR Society of CPAs that is not publicly available. We examine the association between the occurrence of the ethical violations and certain variables such as gender, type of practice performed by the CPA, and whether the CPA participates in a peer review program. Results of a multiple correspondence analysis (MCA) suggest that not being a member of the AICPA, practicing as a sole practitioner, and not participating in a peer review program seem to be more associated with the occurrences of ethical violations by CPAs. We compare our findings with prior research on ethical infractions committed by CPAs in the United States and find some differences attributable to the institutional settings in PR. Overall, our results suggest the importance of codes of conduct in the accounting profession and compliance with such ethical guidelines by practicing accountants.

Suggested Citation

  • Rogelio J. Cardona & Zabihollah Rezaee & Wanda Rivera-Ortiz & José C. Vega-Vilca, 2020. "Regulatory Enforcement of Accounting Ethics in Puerto Rico," Journal of Business Ethics, Springer, vol. 167(1), pages 63-76, November.
    • Handle: RePEc:kap:jbuset:v:167:y:2020:i:1:d:10.1007_s10551-019-04137-4
    DOI: 10.1007/s10551-019-04137-4
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    1. J. Gregory Jenkins & Velina Popova & Mark D. Sheldon, 2018. "In Support of Public or Private Interests? An Examination of Sanctions Imposed Under the AICPA Code of Professional Conduct," Journal of Business Ethics, Springer, vol. 152(2), pages 523-549, October.
    2. Michel Tenenhaus & Forrest Young, 1985. "An analysis and synthesis of multiple correspondence analysis, optimal scaling, dual scaling, homogeneity analysis and other methods for quantifying categorical multivariate data," Psychometrika, Springer;The Psychometric Society, vol. 50(1), pages 91-119, March.
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