Based on Aristotle’s philosophy that ethics can be taught, this study examines whether the behavior of licensed accounting professionals is influenced by increased ethics Continuing Professional Education (CPE) required by state licensing boards. Since states are the licensing and oversight bodies of Certified Public Accountants (CPAs), it is important to know what actions state boards have taken to help increase the public trust of the accounting profession, and the efficacy of those actions.
States were selected based on whether they required ethics CPE hours and whether this changed during the study period 2008-2019. Fourteen states were selected (46% of U.S. CPAs). Data was obtained from publicly available resources on the individual state boards’ websites. 7,969 sanctions were hand coded, scored and analyzed for 3 variables: the sanctions rate, severity of acts conducted by CPAs and the severity of sanctions assessed on CPAs.
The results of this study identified inconsistencies in the monitoring and oversight activities of state licensing boards and the variability of publicly available information. Findings suggest that the number of sanctions may be more affected by the level of oversight of state boards of accountancy, driven by resources available to them, than the behavior of regulated accounting professionals.