Ethics Flashcards
what are the 5 fundamental principles?
- Integrity
- Objectivity
- Professional competence and due care
- Confidentiality
- Professional Behaviour
What ethical factor should be applied to all work?
- Professional Scepticism
- Meaning having a questioning mind and being alert to misstatements or potential fraud
what is a self interest threat?
members financial or other interest, or those of an immediate/ close family member influencing decisions of the member
When is it acceptable to break confidentiality?
When you suspect money laundering
what is a self review threat?
previous judgement needs to be re-evaluated by the same member responsible for that judgement
what is an advocacy threat?
when a member promotes a position or opinion to the point that objectivity may be compromised
what is a familiarity threat?
because of a close relationship a member becomes too sympathetic to interests of a client
what is an intimidation threat?
when a member is deterred from acting objectively by actual or perceived pressure from others
Give some examples of safeguards to threats:
- education/training experience to enter the profession
- CPD requirements
- Corporate governance regulations
- Professional standards
- Monitoring/disciplinary procedures
- External review
- Complain systems
- Explicitly stated duty to report breaches of ethics
What are the steps for conflict resolution?
1) Consider the following:
- Relevant facts and parties
- Ethical issues involved
- Fundemantal principles relating to the matter
- Established internal; procedures
- Possible alternative courses of action
2) Seek advice within the firm
3) If not applicable (eg Sole Trader) seek legal advice from ICAEW
4) Consider withdrawing from the engagement
conflicts of interest can rise between who?
- firm and client
- two clients (managed by the same firm)
what are the steps to go around a conflict of interest?
1) Notify relevant parties about conflict of interest
2) Obtain consent from relevant parties to act
3) If consent is refused, cease acting for one party involved in conflict
4) If consent is granted
- Use seperate engagement teams
- Impose procedures to prevent access to information
- Issue guidelines in relation to security and confidentiality
- Regular review of safeguards by senior members no involved
5) If conflict can’t be resolved, consider not accepting from on engagement
what is tax avoidance?
using any legal method to reduce and entity’s tac burden
what is tax planning?
form of tax avoidance where the tax payer uses the tax legislation legally to minimise tax bills but pay the correct amount of tax (eg claiming allowances)
what is tax evasion?
illegally seeking to pay less tax than is due by deliberately misleading HMRC (fines/imprisonment)
