1:3 Ethics and tax evasion Flashcards
What is tax avoidance?
Arranging events and transactions in a certain timescale to secure a tax advantage
What is tax evasion?
Deliberate falsification of information and deceit e.g. working on the hidden economy
What is the tax gap?
The difference between what the treasury expects tp receive in terms of tax revenue and what the government actually collects.
What are the different codes of ethics? (3)
The IESBA sets robust ethics standards for professional accountants
The ICAEW’s code of ethics is derived from the IESBA
Professional Conduct in Relation to Taxation (PCRT) - unified conduct which a lot of tax bodies accept as good conduct
What are the common themes from all of the codes of conduct? (4)
Principals and threats
Conflict resolution and actions
Disclosure of information
Conflicts of interest
What are the fundamental principles of being ethical? (5)
Integrity - straightforward and honest
Pro behaviour - comply with laws and regulations and avoid actions that discredit the profession
Pro competence - maintain professional knowledge and skill
Objectivity - Avoid bias, conflict of interest or undue influence
Confidentiality - don’t disclose information outside of business unless legal obligation to do so
Threats to compliance with the fundamental principals? (5)
Self- interest Self-review Advocacy - fighting both sides of the argument Familiarity Intimidation
Factors to consider while initiating a conflict resolution? (6)
Relevant facts Relevant parties Ethical issues involved Fundamental principals related Established internal procedures Alternative course of action
What are the rules on confidentiality?
Permitted by law and is authorised by client
Required by law
Duty or right to disclose and not prohibited by law
No duty to report to HMRC without client permission
What is the purpose of an engagement letter?
To have permission to disclose information to HMRC and set out responsibilities clearly
