Ethics

Question 1

On top of the fundamental principles, what are the 5 standards which professional accountants must observe when advising on tax planning?

Answer 1

Professional conduct in relation to tax?

1) Client specific
2) Lawful
3) Disclosure and transparency
4) Tax planning arrangements
5) Professional Judgement and appropriate documentation

Question 2

What actions should be taken when there is a conflict of interest? (3)

Answer 2

1) Separate teams
2) Information barriers
3) Confidentiality agreements

Question 3

What 5 factors should be considered when an ethical conflict arises?

The what happens if not resolved? (3)

Answer 3

1) The relevant factors and parties
2) The ethical issues involved
3) The fundamental principles relating to the matter in question
4) Any established internal procedures
5) Possible alternative courses of action

IF NOT RESOLVED:

1) Seek advice within firm
2) Seek legal / ICAEW advice
3) Consider withdrawing

Question 4

What is the minimum amount of indemnity according to ICAEW’s PPI regulations?

Answer 4

1) If the gross income of the firm is less than £600,000
- 2.5 times its gross fee income, with a minimum of £100,000

2) Otherwise £1.5m

Question 5

What is the tax gap?

Answer 5

The tax gap is the difference between the total amount of taxes owed to the government and the actual amount received

Question 6

To comply with anti money laundering regulations how long does a firm have to hold client ID?

Answer 6

5 years after termination of client relationship

Question 7

What actions should a member take if the firm makes a mistake worth > £200

Answer 7

1) See client authority to advise HMRC on the error
2) Warn the client of possible legal consequences of not advising HMRC of the error
3) Advice that if consent is not given, they will cease to act for the client
4) Keep written records of all correspondence