5. Principles of Professional Ethics

Question 1

What are ethics?

Answer 1

-the professional ethics of an organisation are the moral principles or standards that govern the conduct of the members of that organisation

Question 2

What is the code of professional ethics?

Answer 2

-designed to help members maintain the high standard of professionalism that is expected of them

Question 3

What is the AAT code based off?

Answer 3

-the international ethics standards board for accountants
(IESBA)

Question 4

What does the AAT code state?

Answer 4

-sets out expected standard
-helps protect public interest
-helps maintain AAT’s good reputation

Question 5

Who does the AAT code apply?

Answer 5

-applies to all fellow, full, affiliate and student members of AAT

Question 6

How is the AAT code separated?

Answer 6

1. Part A applies to all members
2. Part B represents additional guidance which applies specifically to members in practice
3. Part C applies specifically to members in business

Question 7

What are the 5 fundamental principles of professional ethics?

Answer 7

1. professional behaviour
2. professional competence
3. confidentiality
4. integrity
5. objectivity

Question 8

What is integrity?

Answer 8

-the quality of being honest and having strong moral principles that you refuse to compromise

Question 9

What are the 3 key ethical values that contribute to integrity?

Answer 9

1. honesty
2. transparency
3. fairness

Question 10

What is objectivity?

Answer 10

-someone who bases their opinion and decisions on real facts and is not influenced by personal beliefs or feelings

Question 11

What is independence?

Answer 11

-freedom from control or influence of others

Question 12

What is professional competence and due care?

Answer 12

-ensures that a client or employer receives competent professional service based on current developments in practice

Question 13

What is professional competence?

Answer 13

-having a duty to keep themselves up to date with developments in the accounting profession
-expected to do this by completing CPD

Question 14

What is due care?

Answer 14

-when carrying out an assignment an accountant must always take the appropriate amount of care to ensure that the quality of the work meets high standards

Question 15

What is the ‘duty of confidentiality’?

Answer 15

-they have an obligation to respect the confidentiality of info about a client’s affair which has been gained during their employment or during the course of their professional work
-extends to the period after the relationship has ended

Question 16

When is it acceptable to disclose confidential information?

Answer 16

-when authorised by the client or employer
-when disclosure is required by law
-when there is a professional duty to disclose

Question 17

When is the disclosure of confidential information required by law?

Answer 17

-when the info is required as evidence in the court of law
-when the law has been broken and the info has to be disclosed to the relevant authorities

Question 18

What may you be required to provide when summoned to the court as a witness?

Answer 18

-provide documents which will be used as evidence
-appear in court in person to give evidence

Question 19

When might be another time when you have to disclose information?

Answer 19

-when a client or employer has broken the law
-eg. money laundering

Question 20

What is money laundering?

Answer 20

-to move illegally acquired cash through financial systems so that it appears to be legally acquired

Question 21

What are the main 4 circumstances when you have a professional duty to disclose information?

Answer 21

1. to comply with the quality review of an IFAC (international federation of accountants)
2. to respond to an inquiry by a regulatory accounting body or disciplinary nature
3. to protect the professional interests of the accountant in legal proceedings
4. to comply with technical and ethical standards

Question 22

What 3 points must you consider before disclosing information?

Answer 22

1. whether you know all the facts, and if there is sufficient evidence
2. decide who is the right person to disclose info to, and by how
3. if you could face any legal consequences

Question 23

What should you follow when faced with conflict between ethical principles and data protection?

Answer 23

-follow code of ethics

Question 24

Examples of internal disciplinary procedures by an employer

Answer 24

-verbal warning
-written warning
-disciplinary hearing
-opportunity to appeal
-suspension
-dismissal

Question 25

Who takes disciplinary action by professional bodies?

Answer 25

-the FRC
financial reporting council

Question 26

What are the 2 types of misconduct?

Answer 26

-bringing the profession into disrepute
-acting in breach of regulations

Question 27

What are some types of penalties?

Answer 27

-written undertaking to refrain
-fine
-reprimanded
-ineligible for a practicing licence
-suspended membership
-expelled from the body

Question 28

What are the 3 classes of fraud?

Answer 28

1. by false representation
2. failing to disclose information
3. abuse of position

Question 29

What is bribery?

Answer 29

-giving or receiving something of value with the intention of influencing the recipient to do something favourable to the giver of the bribe

Question 30

What are the 4 key bribery act offences?

Answer 30

1. bribing another
2. receiving
3. bribing a foreign official
4. failing to prevent bribery

Question 31

What do professional bodies base their ethical codes on?

Answer 31

-the IESBA
-international ethics standard board for accountants
-part of the IFAC