State Board Report

September 2011

The rate of enforcement actions taken against CPAs by the Texas State Board of Public Accountancy (TSBPA) decreased significantly during the same period that ethics education has been mandatory in the state, a team of Baylor University researchers reported. Writing in the July/August 2011 issue of Today’s CPA, Kathy Hurtt and C. William Thomas state: “After five years of implementation experience, licensed CPAs in Texas have a relatively positive impression of the impact of a mandatory three-hour college ethics course on their careers.” However, they also found: “Practicing CPAs in Texas have a somewhat less positive impression as to the effectiveness of the mandatory two-year ethics update. They cite excessive frequency, redundancy and irrelevance of subject matter as contributing factors.”

Professors Hurtt and Thomas received completed questionnaires from 2,696 individuals licensed between 2005 and 2010 (a 28.3 per cent response rate). When the professors asked respondents to comment on why the number of enforcement actions had dropped besides the required ethics course, several issues were cited:

  1. Increased media coverage of high profile unethical practice in business and the consequences of those practices;
  2. Increased governmental regulation under SOX and the PCAOB;
  3. A recessionary economy that may have resulted in more circumspect behavior by CPAs; and
  4. Fallout from the Arthur Andersen and Enron cases.


The authors conclude that their study proves that ethics education can have a positive impact on individuals even if it is obtained after their childhood. They write: “It is also a testimony to the courage of the TSBPA in implementing such a requirement, in the face of what was, at the time, rather formidable opposition from both the practicing and academic branches of the profession.”

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