Chapter 2 Professional And Ethical Duty Of The Accountant

Question 1

The ACCA Code of Ethics and Conduct

Answer 1

1. Objectivity
2. Integrity
3. Professional competence and due care
4. Confidentiality
5. Professional behaviour

Question 2

Complying with accounting standards

Answer 2

1. Professional competence
   Circumstances may threaten the ability of accountants in these roles to perform their duties with the appropriate degree of professional competence and due care include:

• insufficient time
• incomplete, restricted or inadequate information
• insufficient experience, training or education
• inadequate resources

2. Objectivity and integrity
   - financial interests such as profit related bonuses or share options
   - inducements to encourage unethical behaviour
3. ACCA’s Code of Ethics and Conduct identifies that accountants may be pressurised to be associated with misleading information.

Members should not be associated with information that:-

• contains a materially misleading statement
• contains statements or information furnished recklessly
• has been prepared with bias
• omits or obscures information required to be included where such omission or obscurity would be leading

Question 3

Non- financial reporting standards

Answer 3

1. Transparency
   Stakeholders demand greater transparency in the information provided by companies.

Narrative information is now demanded on a wide range of areas such as:

• Trends and factors likely to affect the future development of the company
• Environment, HR and social/ community issues
• Policies and their effectiveness

2. Standards
   In the last two decades businesses have come under increasing scrutiny in respect of their responsibilities towards all of their stakeholders and the environment and society in which they operate.

Types of issues include governance, management systems, impact data, target setting, policy statements, values statements.