02 DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION

280 BOARD OF ACCOUNTANCY

SUMMARY: This chapter adopts a code of professional conduct.

The Board adopts the following Code of Professional Conduct. Interpretations and rulings of this or similar Codes of Conduct by the AICPA, courts or the Boards of other states, may constitute persuasive but not binding authorities with the Board, unless based on language of a Code that is materially inconsistent with these Rules.

1. 1. PREAMBLE

The public places trust and confidence in the profession and the services it provides; consequently, licensees have a duty to conduct themselves in a manner that will be beneficial to the public and which fosters such trust and confidence. This Code of Professional Conduct identifies seven fundamental principles of conduct, six of which are intended to govern licensees' professional performance whether they are in public practice, industry, not‑for‑profit organizations, government, education or other professional endeavors. The seventh principle, independence, applies only to those professional services where it is required by professional standards. This Code of Professional Conduct defines the conduct that the public has a right to expect of the licensee, as well as all persons or entities the licensee has the authority or capacity to control.

1. With the exception of independence, these principles are universal and apply to all services and activities performed by the licensee in all aspects of his or her professional conduct. Independence, however, is a unique principle that applies only to those professional services where it is required in accordance with professional standards.

   Users of the licensee's services draw confidence from the knowledge that the profession is bound to a framework which requires continued dedication to professional excellence and commitment to ethical behavior that will not be subordinated to personal gain.

2. 2. PRINCIPLE: PUBLIC INTEREST

   The grant of a license indicates that an individual has met the criteria established by state boards of accountancy to perform services in a manner that protects the public interest. The licensee must, therefore, have a keen consciousness of the public interest. The public consists of clients, credit grantors, governments, employers, investors, the business and financial community, and others who use the services of licensees. Services provided by licensees support and facilitate many societal needs, including the orderly functioning of commerce and the capital markets.

   Because the licensee is seen as a representative of the profession by the public who retains or employs him or her or uses his or her services, the licensee should avoid conduct that might conflict with the public interest or erode public respect for, and confidence in, the profession.

3. 3. PRINCIPLE: INTEGRITY

   Integrity is a character trait demonstrated by acting honestly, candidly, and not knowingly misrepresenting facts, accommodating deceit, or subordinating ethical principles. Acting with integrity is essential to maintaining the public's trust. It incorporates both the spirit and substance in the application of the ethical and technical standards that govern the profession, or in the absence thereof, what is just and right.

   A licensee should act with integrity in the performance of all professional activities in whatever capacity performed.

4. 4. PRINCIPLE: OBJECTIVITY

   Objectivity is a distinguishing feature of the accounting profession and is critical to maintaining the public's trust and confidence. It is a state of mind that imposes the obligation to be impartial and free of bias that may result from conflicts of interest or the inappropriate subordination of judgment. Objectivity requires a licensee to exercise an appropriate level of professional skepticism in carrying out all professional activities.

   Although a licensee may serve multiple interests in many different capacities, objectivity must be maintained. This requires a careful assessment of the effects on objectivity of all professional relationships and activities.

   A licensee should maintain objectivity in the performance of all professional activities in whatever capacity performed.

5. 5. PRINCIPLE: DUE CARE

   Due care imposes the obligation to perform professional activities with concern for the best interest of those for whom the activities are performed and consistent with the profession's responsibility to the public. It is essential to preserving the public's trust and confidence. Due care requires the licensee to discharge professional responsibilities with reasonable care and diligence and to adequately plan and supervise all professional activities for which he or she is responsible.

   A licensee should act with due care in the performance of all professional activities in whatever capacity performed.

6. 6. PRINCIPLE: COMPETENCE

Competence is derived from a combination of education and experience. It begins with a mastery of the common body of knowledge, skills, and abilities, and requires a commitment to life‑long learning and professional improvement. A licensee should possess a level of competence, sound professional judgment, and proficiency to ensure that the quality of his or her activities meets the high level of professionalism required by these Principles. A licensee is responsible for assessing his or her own competence, which includes evaluating whether education, experience, and judgment are adequate for the responsibility assumed.

1. A licensee should be competent in the performance of all professional activities, in whatever capacity performed, and comply with applicable professional standards.
2. 7. PRINCIPLE: CONFIDENTIALITY

   A licensee has an obligation to maintain and respect the confidentiality of information obtained in the performance of all professional activities. Maintaining such confidentiality is vital to the proper performance of the licensee's professional activities.

   A licensee shall not use or disclose, or permit others within the licensee's control to use or disclose, any confidential client or employer information without the consent of the client or employer. This obligation continues after the termination of the relationship between the licensee and the client or employer and extends to information obtained by the licensee in professional relationships with prospective clients and employers.

   This principle shall not be construed to prohibit a licensee from disclosing information as required to meet professional or legal obligations.

3. 8. PRINCIPLE: INDEPENDENCE

   Independence, where required by professional standards, is essential to establishing and maintaining the reliability of, and the public's confidence in, the information reported on by the licensee.

   A licensee should be independent in fact and appearance. Independence in fact is the absence of a licensee's interest in, relationship with, or services provided to, a person or entity that results in the licensee's loss of objectivity. Independence in appearance is the absence of such interests, relationships, or services which may, to a reasonable person having knowledge of all the facts, appear to result in an unacceptable threat to the licensee's objectivity.

   When considering independence issues, it is presumed that the reasonable person would consider, among other factors:

4. A. A licensee's normal strength of character under the circumstances;

B. Pressures that may be exerted on the licensee by clients and others;

1. C. The countervailing pressures of legal liability and professional discipline, including loss of reputation and license; and
   1. D. The safeguards established by the profession for the licensee's practice entity, such as peer review and quality control standards.

   A licensee in the practice of public accounting should be independent in fact and appearance when engaged to provide services where independence is required by professional standards.

STATUTORY AUTHORITY: 32 M.R.S. §12214(4)

1. EFFECTIVE DATE:

   Prior to July 1, 1978 (filed August 14, 1978) - as "Unlawful Acts."

   Chapter 10, "Rules of Conduct," was filed at the same time.