Ethics Flashcards
Define ethics in the accounting profession:
The set of moral principles, values, and standards that guide the behaviour and conduct of accountants in their professional duties.
Why is ethical behaviour fundamental to the accounting profession?
Because accountants are entrusted with critical financial information that can significantly impact businesses, investors, and the public.
What is an ethical issue?
An ethical issue exists when the decision of the decision maker (an accountant) has consequences for another person or persons so they must make a choice.
What is coded bias?
When machine learning algorithms can be biased in their implementation and use which can disadvantage certain groups.
What are the five fundamental principles of ethics in accounting?
- Integrity
- Objectivity
- Professional Competence and Due Care
- Confidentiality
- Professional behaviour
Define integrity in accounting:
A professional accountant should be straightforward and honest in all professional and business relationships.
Define objectivity in accounting:
A professional accountant should not allow bias, conflict of interest or undue influence of others to override professional or business judgments.
Define professional competence and due care in accounting:
A professional accountant has a continuing duty to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques.
Define confidentiality in accounting:
A professional accountant should respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such information to third parties without proper and specific authority unless there is a legal or professional right or duty to disclose.
Define professional behaviour in accounting:
A professional accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession.
Who are the key organisations focusing on ethics in the accounting profession?
- The International Federation of Accountants (IFAC)
- The International Ethics Standards Board for Accountants (IESBA)
What does IFAC do?
IFAC sits at the top and works to support the development, adoption, and implementation of high-quality international standards. Such as those of IESBA’s.
What does IESBA do?
IESBA sets international ethic standards.
