1.1 Roles of Accounting and Accountants

Question 1

State the role of accounting.

Answer 1

Accounting provides accounting information for decision-making by business owners and other stakeholders.

Question 2

State the role of accountants.

Answer 2

1. Act as stewards of businesses through providing accounting information for stakeholders’ decision making.
2. Set up accounting information system to collate, record, organise and report accounting information so that owners and other stakeholders can make decisions regarding the management of resources and performance of businesses.
3. Think critically, solve problems, adapt and meet the need for sophisticated accounting and business information.
4. In the face of an evolving business environment and rapid technological advancement, provide relevant information in a timely manner for decision-making and insights that are easily and appropriately understood by owners and other stakeholders based on accounting theories.
5. Adhere to professional ethics, uphold integrity and be objective as stakeholders place trust in the information provided by accountants.

Question 3

Define integrity.

Answer 3

Integrity is being straightfoward and honest in all professional and business relationships.

Question 4

Define objectivity.

Answer 4

Objectivity is not letting bias, conflict of interest or undue influence of others override professional judgement.

Question 5

Explain the importance of having integrity and objectivity in preparing and presenting accounting information.

Answer 5

Stakeholders place trust in the information provided by accountants who must adhere to professional ethincs, uphold integrity and be objective. An ethical accountant will not mislead users into making poor decisions.

Question 6

Define stewards.

Answer 6

Stewards are caretakers of the business who are responsible for managing the resources of the business on behalf of the owners.

Question 7

Give examples of actions that an ethical accountant will not do.

Answer 7

• Prepare accounting records that contain false information
• Accept a gift or preferential treatment
• Get involved in the selection of a vendor when his immediate family could benefit financially from the transaction
• Prepare false information due to the threat of dismissal

Question 8

Give examples of unethical actions of an accountant.

Answer 8

• Record sales revenue / earnings when there are no sales
• Agree to report a lower loss figure with the promise of a higher bonus
• Volunteer to be part of the team that evaluates proposals from vendors when his or her spouse works for one of these vendors
• Report a higher profit figure by succumbing to pressure from his or her boss

Question 9

What is an ethical accountant like?

Answer 9

An ethical accountant is someone who has integrity and is objective. He or she will not mislead users into making poor decisions.

Question 10

What is an accountant with integrity like?

Answer 10

Straightforward and honest in all professional relationships.

Question 11

What is an objective accountant like?

Answer 11

An accountant who is objective will not let bias, conflict of interest or the undue influence of others override his or her professional judgement.