Cima ethics code Flashcards
Name the five fundamental CIMA principles.
integrity objectivity professional behaviour confidentiality professional competence / due care
Define integrity
the quality of being honest and having strong moral principles, e.g. don’t turn a blind eye, stand up for their beliefs etc
Define objectivity
The qualify of not being influenced by bias, conflict of interest, etc but solely by facts.
Professional competence/due care
Must be knowledgeable, skilled, qualified for the job, must keep up with legislation/cpd
Confidentiality
Keeping private information about financial state of companies to yourself, unless a legal duty exists to disclose this information
Professional behaviour
It’s a form of code of conduct in the work place and it centres around respectful and courteous behaviour
Name five threats to professional ethics and the three levels they can be applied at.
Self-interest Self-review Advocacy Familiarity Intimidation
3 levels: safeguards at work environment, detection increasing safeguards, and safeguards to deal with particular cases
Describe self-interest threat and give examples
It occurs when the interest of one entity is influenced by another entity’s interest and hence independence is threatened.
E.g. the promise of a bonus if you sign off a dubious financial forecast
E.g. your brother is the owner of a major supplier to the business
E.g. contingent fees where you’re paid a bigger fee for more optimistic reports but smaller fee for pessimistic reports
Describe self-review threat
It’s a bias towards your own work, if you recheck it you’re likely to be sceptical of your own mistakes hindering your ability to find own errors
Describe advocacy threat
Advocacy threat arises when a CIMA accountant gives his opinion or point of view to such an extent that it undermines objectivity. Give facts but not unwarranted support.
Describe familiarity threat
This threat arises because of close proximity between the accountant and client, e.g. auditor and his brother is a finance director in the firm. It threatens integrity of the auditor.
Describe intimidation threat
It’s an actual or perceived action usually from a higher position of authority that aims to deter the accountant from acting with integrity, e.g. blackmailing.
