Answer
Rule 203 of the Code of Professional Conduct prohibits a member of the American Institute of Certified Public Accountants (AICPA) from expressing an opinion that financial statements conform with GAAP (Generally Accepted Accounting Principles) if those statements contain a material departure from an accounting principle promulgated by the FASB (Financial Accounting Standards Board), or its predecessors, the APB (Accounting Principles Board) and the CAP (Committee on Accounting Procedure ), unless the member can demonstrate that because of unusual circumstances the financial statements would otherwise have been misleading.
Work Step by Step
Failure to follow Rule 203 can lead to a loss of a CPA’s license to practice. This rule is extremely important because it requires auditors to follow FASB (Financial Accounting Standards Board) standards.
