1. Principles of Professional Ethics

Question 1

AAT Code of Professional Ethics

Designed to help its members maintain the high standard of professionalism that is expected of them.

Compliance with the code is a Professional Obligation rather than a Legal Obligation.

Answer 1

Like all professional accounting bodies…

The AAT Code is based on the:
International Ethics Standard Board for Accountants Code of Ethics (IESBA)

IESBA is the independent standard-setting board responsible for setting global ethical standards for accountants

IESBA is part of the:
International Federation of Accountants (IFAC)

Question 2

AAT Code of Professional Ethics states that:

Answer 2

• Sets out expected standard of professional behaviour.
• Helps protect the public interest.
• Helps maintain the AAT’s good reputation

Question 3

AAT Code of Professional Ethics applies to:

Answer 3

All fellow, full, affiliate and student members.

• Part A applies to All members
• Part B represents additional guidance which applies specifically to Members In Practice (ie work in an accounting practice)
• Part C applies specifically to Members in Business

Question 4

In order to achieve the objectives accountants should observe the 5 fundamental ethical principles…

Remember when ethical issues arise, not just one but a number of fundamental principles may be involved in any one particular case.

Answer 4

Integrity

Professional behaviour

Objectivity

Professional Competence and Due Care

Confidentiality

Question 5

INTEGRITY basics

Answer 5

Being honest and having strong moral principles that you refuse to compromise.

Straightforward & honest in all professional & business RELATIONSHIPS & when carrying out professional WORK

Do not be associated with MISLEADING INFORMATION

Question 6

INTEGRITY - 3 key ethical values

Answer 6

• HONESTY - truthful & trustworthy
• TRANSPARENCY - operating in a way that is easy for others to see what is being done or said
• FAIRNESS - acting reasonably and without Bias

Question 7

OBJECTIVITY basics

Answer 7

Decisions should be based on real facts and not influences by personal beliefs or feelings.

The code says an accountant must not allow professional or business judgement to be overridden by:

• BIAS
• CONFLICT of INTEREST
• UNDUE INFLUENCE of others

Question 8

PROFESSIONAL COMPETENCE & DUE CARE basics

Answer 8

The code says members must:

• Maintain professional knowledge & skill to be competent in current developments in Practice; Legislation & Techniques
• Act Diligently and in accordance with applicable technical standards when providing professional services (Careful, thorough & timely as appropriate to an assessment of the task)

Question 9

CONFIDENTIALITY basics

Answer 9

Respect confidentiality of information acquired as a result of prof & biz relationships.

Don’t disclose info to third parties without ‘Proper and Specific’ authority

UNLESS there is a legal or professional Right or Duty to disclose.

Confidential information acquired shall not be used for for the personal advantage of the member or third parties. (ok if in public domain already)

Question 10

PROFESSIONAL BEHAVIOUR basics

Answer 10

accountants should:

Adopt professional behaviour to comply with relevant laws and regulations

Avoid any action that brings our profession into disrepute.

The whole of the ethical code SETS OUT the required standards of behaviour that accountants should maintain and GIVES GUIDANCE on how to achieve them

Question 11

Importance/benefits of acting ethically:

Answer 11

• Code states that it helps protect the Public Interest; knowing the accountant has duty to act ethically supports the level of confidence the public has in accountants
• An org that acts ethically enhances its probity & reputation.
• an accountant that acts ethically enhances his/her professional reputation
• if an accountant acts ethically this will help protect his/her legal liability

Question 12

The accountancy profession (including AAT) is committed to 6 objectives:

Answer 12

1. MASTERING SKILLS & TECHNIQUES through learning & training.
2. Developing an ETHICAL APPROACH to WORK and observing a code of ethics.
3. Acknowledging a DUTY to SOCIETY as a whole
4. Adopting an objective approach, FREE FROM CONFLICTS of INTEREST
5. Providing accounting services to the HIGHEST STANDARDS.
6. ENSURING the PUBLIC KNOWS that accountants provide services to these high standards

Question 13

Global bodies that uk accounting bodies base their ethical codes on

Answer 13

IESBA
International Ethics Standards Board for Accountants
member of
IFAC
International federation of Accountants