ncsa rules of professional conduct

RULES OF PROFESSIONAL CONDUCT

1. An accountant shall not violate the confidential relationship between himself and his client or former client.

2. An accountant shall not allow any person to practice in his name who is not in partnership with him or in his employ.

3. Commission, brokerage, or other participation in the fees or profits of professional work shall not be allowed or paid directly by a member to any person not in the public accounting profession. Commission, brokerage, or other participation in the fees, charges, or profits or work recommended or turned over to one outside the public accounting profession as incident to services for clients shall not be accepted directly or indirectly by a member.

4. In expressing an opinion on representations in financial statements  which he has examined, an accountant shall:

a. Disclose any material fact known to him which is not disclosed in the financial statements but disclosure of which is necessary to make the financial statements not misleading;

b. Report on any material misstatement known to him to appear in the financial statements;

c. Acquire sufficient information to warrant expression of an opinion or, if his expectations are sufficiently material to negate the expression of an opinion, he shall refrain from expressing an opinion; and 

d. Direct attention to any material departure from generally accepted accounting principles and disclose any material omissions of generally accepting auditing procedures applicable in the circumstances.

5. An accountant shall not sign a report purporting to express his opinion as the result of an examination of financial statements unless they have been examined by him, a mentor, or an employee or his firm.

6. An accountant shall not adversely criticize the professional performance of another accountant in the presence of anyone other than the accountant who is the subject of such adverse criticism.

7. Direct or indirect offer of employment shall not be made by an accountant to any employee of another accountant without first     informing such accountant. This rule shall not be construed so as to inhibit negotiations with anyone who, of his own initiative or in response to public advertisement, shall apply for employment.

8. Professional service shall not be rendered or offered for a fee which shall be contingent upon the findings or result of such service. This rule does not apply to cases involving federal, state or other taxes in which the findings are those of the accountant. Fees fixed by courts or other public authorities, which therefore are of undetermined amount at the time when an engagement is undertaken, are not regarded as contingent fees within the meaning of this rule.

9. An accountant may advertise or otherwise make known the availability and kinds of services offered, provided that:

a. The advertising is done in a dignified manner.

b. Kinds of advertising may include, but not be limited to:

1. Listing in directories;

2. Publication of a "card";

3. Mailings to the general public or a selected class of the general public; and

4. Discreet advertising in printed and electronic media.

c. The advertising must not be false, fraudulent, misleading, deceptive or otherwise unfair.

10. An accountant shall not jeopardize his professional independence by:

a. Accepting a position as employee, officer or director of any corporation which is his client;

b. Acquiring or being committed to acquire a substantial financial interest in any enterprise which is his client;

c. Becoming a partner in a partnership which is his client; or

d. Accepting a position of appointment as fiduciary or agent of a client except as necessary to the performance of his professional function (for example: Power of Attorney to represent client before government agencies is permitted), unless such interest of relationship is disclosed in the report.

11. An accountant shall not permit use of his name in conjunction with an estimate of earnings contingent upon future transactions in a manner which may lead to the belief that the accountant vouches for the accuracy of the forecast.

12. An accountant shall not express his opinion on financial statements of any enterprise financed in whole or in part by public distributions of securities if he owns or is committed to acquire a financial interest in the enterprise which is substantial either in relation to its capital or to his own personal fortune or, if a member of his immediate family owns or is committed to acquire a substantial interest in the enterprise. An accountant shall not express his opinion on financial statements which are used as a basis of credit if he owns or is committed to acquire a financial interest in the enterprise which is substantial either in relationship to its capital or to his own personal fortune or, if a member of his immediate family owns or is committed to acquire a substantial interest in the enterprise, unless he discloses such interest in his report.

13. An accountant shall not make a competitive bid for professional engagements in any state, territory, or the District of Columbia if such a bid would constitute a violation of any rule of the recognized professional societies of accountants or the official board of accountancy in the state, territory, or district.

14. An accountant in practice as an individual may not use a firm name or plural term such as "and Company" or "and Associates" or any other designation indicating anything other than individual ownership, unless such individual shall file a statement of ownership with the proper state or county authority in the state or county in which such individual is doing business.

15. Nothing herein is intended to conflict with U.S. Treasury Department Circular 230. Should a conflict become evident, Circular 230 will supersede these rules as applied to enrolled agents.