1. (a) The content of an ethics course designed to satisfy the four hour ethics CPE requirements of §523.130 of this title (relating to Ethics Course Requirements for Licensees) must be submitted to and be approved by the CPE committee of the board for initial approval and upon request thereafter. The primary objectives of the Ethics Course shall be to:

   1. (1) encourage the licensee to become educated in the ethics of the profession;
   2. (2) convey the intent of the board's Rules of Professional Conduct in the licensee's performance of professional accounting services or professional accounting work, and not mere technical compliance;
   3. (3) apply ethical judgment in interpreting the rules and determining the public interest. The public interest should be placed ahead of self-interest, even if it means a loss of job or client;
   4. (4) emphasize the ethical standards of the profession, as described in this section; and

   5. (5) review and discuss the board's Rules of Professional Conduct and their implications for persons in a variety of practices, including at least one example from subparagraph (A) of this paragraph and at least one example from either subparagraph (B) or (C) of this paragraph:

      1. (A) a licensee engaged in the client practice of public accountancy who performs attest and non-attest services, as defined in §501.52 of this title (relating to Definitions); and
      2. (B) a licensee employed in industry who provides internal accounting and auditing services; or
      3. (C) a licensee employed in education or in government accounting or auditing.

2. (b) To meet the objectives of subsection (a) of this section, a course must be four hours and include components that cover:

   1. (1) ethical principles and values;
   2. (2) ethical reasoning and dilemmas;
   3. (3) the board's Rules of Professional Conduct with special focus on recent changes in those rules; and
   4. (4) sufficient case studies that require application of ethical principles, values, and ethical reasoning within the context of the board's Rules of Professional Conduct.

3. (c) Course content shall be approved only after demonstrating, either in a live instructor format or a blended program format or interactive (computer based) format, as defined in §523.102(c)(1) of this title (relating to CPE Purpose and Definitions), that the course contains the underlying intent established in the following criteria:

   1. (1) the course shall be designed to teach CPAs to achieve and maintain the highest standards of ethical conduct through ethical reasoning and the core values of the profession: integrity, objectivity and independence, as ethical principles in addition to rules of conduct;
   2. (2) the course shall address ethical considerations and the application of the board's Rules of Professional Conduct to all aspects of the professional accounting work whether performed by CPAs in client practice or CPAs who are not in client practice; and
   3. (3) the course shall convey the spirit and intent of the board's Rules of Professional Conduct in the licensee's performance of accounting services or professional accounting work, and not mere technical compliance.
4. (d) Ethics courses must be taught in a single session.
5. (e) Ethics Courses may be reevaluated as required by the board.
6. (f) At the conclusion of each course, the sponsor shall administer a test to determine whether the program participants have obtained a basic understanding of the course content, including the need for a high level of ethical standards in the accounting profession.

7. (g) A sponsor of an ethics course approved by the board pursuant to this section shall comply with the board's rules concerning sponsors of CPE and shall provide its advertising materials to the board's CPE committee for approval. Such advertisements shall:

   1. (1) avoid commercial exploitation;
   2. (2) identify the primary focus of the course; and
   3. (3) be professionally presented and consistent with the intent of §501.82 of this title (relating to Advertising).

Source Note:The provisions of this §523.131 adopted to be effective April 7, 2004, 29 TexReg 3477; amended to be effective February 17, 2008, 33 TexReg 1113; amended to be effective August 11, 2010, 35 TexReg 6827; amended to be effective June 8, 2011, 36 TexReg 3410.