Ethical conflict and reporting unethical behaviour Flashcards
Explain two problems which an accountant may face rgearding a conflict of interest?
The accountant may provide services to one client knowing it will have an adverse effect on the other client (objectivity)
Infromation gained about one client could potentially be beneficial to another (Confidentiality)
How is loyalty linked within an accountant?
An accountant has a duty of loyalty to the accounting profession as well as the employer, this will encourage stability within the work force and create a good team spirit. A culture of strong ethical values will maintain an employees loyalty.
In which situations may an accountant be pressured not to comply with the fundamental ethical principles?
Break the law
Breach the rules and standards of their profession
Be a part of unethical or illegal earnings.
What action should be taken if the accountant is being pressured to carry out an unlawful task?
Persuade the employer not to continue with unlawful activity and rectify the situation asap.
Take it up with higher management but If necessary use the employers formal dispute resolution process
If the accountant is thinking about resigning, then they should obtain advice from their accounting body.
Factors to be considered to resolve ethical conflict?
Assess all relevant ethical issues and fundamental principles involved
Whether internal procedures can resolve the issue
Seek advice from others
If an ethical issue cannot be resolved what action should be taken?
Withdrawing from the team or resiging all together.
Name key organisation values which should be included in the code of conduct?
Transparency
Reporting info clear and on time
Open and honest
Fair treatment, good working conditions
Appropriate use of social media
Paying suppliers a fair price and on time
If there is conflict with the accountants personal values, what action should be taken?
Make their feelings known and discuss the conflict with the manager
What is the affect if an organisation does not comply with the organisations values
Transparency - Put off custoimers trading with the business
Reporting info clear and on time - Poor decisions being made by management
Open and honest - Damage business image
Fair treatment, good working conditions - employees will leave the organisation
Appropriate use of social media
Paying suppliers a fair price and on time - adversly effect relationship with suppliers
What is whistleblowing?
Soemone who tells a person in authority about misoncduct or illegal activity
What points need to be considered to internally whistleblow?
Ensure they know all the facts
Follow employers internal procedures for reporting suspected misconduct
Full explained to management - including the concerns and how the business can be effected
What should occur before externally whistleblowing?
Seek confidential advice from the AAT helpline
What does the Public Interest Disclosure Act protect against?
prosecution by disclosing information which they reasonably believe shows that one of the following has occured:
A criminal offence
Breach of a legal obligation
Miscarriage of justice
In order to be protected by the public interest disclosure act what must the accountant be able to show?
Disclosure has been made in good faith
Reasonably believes that the info is true
What is negligence?
A breach of duty of care that is implied in a paticular situation or relationship
