PUBLIC ACCOUNTING AND FINANCING TERRORIST ORGANIZATIONS AND ACTIVITIES: ETHICAL AND LEGAL OBLIGATIONS

Abstract

Financing terrorist organizations and activities must be fought on at least four fronts within public accounting in the United States: the SEC Audit Requirements, PCAOB Auditing Standards, the AICPA Code of Professional Conduct, and state licensing statutes. This article examines the ethical and legal obligations the public accounting profession face presented by these three domains. We argue first that CPAs have an ethical obligation to report to appropriate authorities evidence of financing terrorist organizations and activities discovered during the course of providing professional services which are not recognized by the SEC Audit Requirements, PCAOB Auditing Standards, the AICPA Code of Professional Conduct, or state licensing statutes, and second that the SEC Audit Requirements, the PCAOB Auditing Standards, the AICPA Code of Professional Conduct, and state licensing statutes should be revised to explicitly recognize such ethical obligations and create legal obligations to report to appropriate authorities evidence of financing terrorist organizations and activities discovered during the course of providing professional services.