03. Professionalism, Ethical Codes And The Public Interest

Question 1

Define public interest.

Answer 1

What is beneficial to society as a whole.

The collective well-being of the community of people and institutions the professional accountant serves.

Question 2

What is social responsibility?

Answer 2

Individuals and businesses have a duty to act in the best interests of the environments in which they operate and society as a whole.

Question 3

Outline 3 advantages of CSR.

Answer 3

1. Aligning the organisation’s culture with that of ethical investors, consumers and suppliers.
2. Enhancement of business reputation.
3. Mitigating the risk of conflict with local communities or regulators.

Question 4

What is a code of ethics?

Answer 4

A set of standards, rules, guidelines and values that govern and guide ethical conduct in a company, profession or organisation of its employees.

Question 5

Outline 5 fundamental principles of professionalism.

Answer 5

1. Integrity - being straightforward and honest in all professional and business relationships.
2. Objectivity - not to compromise professional or business judgments because of bias, conflict of interest or undue influence of others.
3. Professional competence and due care - to maintain the professional knowledge and skill required to provide employers and clients with competent professional service, and to act diligently and in accordance with technical and professional standards.
4. Confidentiality - respect for the confidentiality of information acquired as a result of professional and business relationships. Such information must not be:

• disclosed to third parties without proper and specific authority unless there is a legal or professional right or duty to disclose.
• used for the personal advantage of the professional accountant or third parties.

5. Professional behaviour - compliance with relevant laws and regulations and avoidance of any action that may discredit the profession.

Question 6

What is a conflict of interest?

Answer 6

A person’s or organisation’s obligation to act in the interests of another is interfered with by a competing interest which may obstruct the fulfilment of that obligation.