9 Flashcards
What is ethics
Ethical behaviour involves choosing actions that are right, proper, and just
Within a group, each member bears some responsibility for well-being of other members
They should be willing to sacrifice their own self interest for well-being of Group
Why is there a need for accounting ethics
Unforeseen business failures experienced over past decade
Increased emphasis on accountability and ethical behaviour
Management accountants have an obligation to adhere to high standards of ethical conduct
Profit maximisation objectives should be constrained by requirement that profits be achieved through legal and ethical means
What is the biggest challenge with ethical dilemmas
When they arise, employees frequently don’t understand that such a dilemma has arisen and what correct action should be taken to rectify dilemma
Professional accounting associations offer support to members troubled by ethical issues
What is the CIMA code of ethics principles
Integrity
Objectivity
Professional Competence and due care
Confidentiality
Professional behaviour
What are the threats to ethical principles
Self interest threat
Self review threat
Advocacy threat
Familiarity threat
Intimidation threat
What is self interest threat
Threat that a financial or other interest will inappropriately influence professional accountants judgement or behaviour
What is self review threat
Threat that a professional accountant won’t appropriately evaluate results of previous judgement made or activity or service performed by professional accountant or by another individual within professional accountants firm or employing organisation on which accountant will rely when forming a judgement as part of performing a current activity of providing a current service
What is advocacy threat
Threat that a professional accountant will promote a clients or employers position to point that professional accountants objectivity is compromised
What is familiarity threat
Threat that due to a long or close relationship with a client or employer, the professional accountant will be too sympathetic to their interests or too accepting of their work
What is intimidation threat
Threat that a professional accountant will be deterred from acting objectively because of actual or perceived pressures including attempts to exercise undue influence over professional accountant
How do you spot or deter unethical behaviour
Certain safeguards may increase likelihood of identifying or deterring unethical behaviour
Effective well-publicised complaint systems
An explicitly stated duty to report breaches of ethical requirements
What are the safeguards created by profession, legislation or regulation
Educational, training and experience requirements for entry into profession
Continuing professional development requirements
Corporate governance regulations
Professional standards
Professional or regulatory monitoring and disciplinary procedures
External review by a legally empowered third-party of reports, returns, communications or information produced by a professional accountant
What are safeguards in the work environment
Leadership that stresses importance of compliance with fundamental principles, laws, rules and regulations
Documented internal policies and procedures requiring compliance with fundamental principles, laws, rules and regulations
Documented policies regarding need to identify ethical threats such as relationships with third parties
What are ways to resolve ethical conflict
Follow your organisations established policies on resolving ethical conflicts
Discuss issue with your immediate supervisor except when supervisor is involved
If your supervisor is involved, present issue to next level
Seek professional or legal advice
Refuse
