1: Ethics

Question 1

Fundamental principles

Answer 1

PIPCO

Professional behaviour - Comply w all relevant laws/regs, avoid action which discredits profession.
Integrity - Be straightforward and honest in all business dealings
Professional competence and due care - Maintain pro knowledge/skill, act dilligently
Confidentiality - Not sharing client info
Objectivity - Avoid bias

Question 2

What are the threats to the fundamental principles

Answer 2

• Intimidation
• Familiarity
• Advocacy
• Self review
• Self interest

Question 3

What are the 5 standards of professionalk conduct in relation to taxation (PCRT)

Answer 3

• Client specific
• Lawful
• Disclosure and transparency
• Advising on tax planning arangements
• Professional judgement and appropriate documentation

Question 4

What factors should be considered during a conflict resolution process?

Answer 4

• Relevant facts/parties
• Ethical issues involved
• Fundamental principles related to matter
• Established internal procedures
• Alternative course of action

Question 5

When to disclose info

Answer 5

• By law
• Authorised by client/employer
• Professional duty to disclose

Question 6

What are safeguards that should be used for conflict of interest?

Answer 6

• Obtaining consent of both clients
• Notifying clients/all parties of potential conflict of interest

Question 7

What are safeguards that could be used for conflict of interest?

Answer 7

• Use of separate engagement teams
• Procedures to prevent access to info
• Use of agreements signed to ensure confidentiality

Question 8

Define money laundering

Answer 8

Term used for a number of offences involving the proceeds of crime or terrorist funds

Question 9

What is the proceeds of crime act 2002

Answer 9

POCA criminalises all forms of money laundering and creates other offences such as failing to report as sus of money laundering and tipping off.

Question 10

When is someone classed as engaging in money laundering

Answer 10

Where they:
- Conceal, disguise, convert, transfer or remove criminal property
- Enter into an arrangement which they know or suspect involves criminal property

Question 11

What is criminal property

Answer 11

Includes:
- Proceeds of tax evasion
- Benefit of bribery/corruption
- Benefits from criminal cartel
- Benefits (saved costs) from failing to comply to regulatory requirements

Question 12

What is tax evasion

Answer 12

Illegal - consists of either:
- Suppressing info HMRC is entitled to or
- Providing HMRC with deliberately false info

Question 13

Under what circumstances can tax avoidance transactions be disregarded?

Answer 13

1. If they are preordained - virually certain from the start that a chain of transactions will take place.
2. Designed with the main aim of avoiding tax

Question 14

What are the 2 things a professional accountant should consider when giving tax advice

Answer 14

HMRC’s position and compliance with 5 standards in PCRT