Ethics

Question 1

What are the six factors to be considered when initiating a formal or informal conflict resolution?

Answer 1

Relevant facts
Relevant parties
Ethical issues involved
Fundamental principles related to the matter in question
Established internal procedures
Alternative courses of action

FEAR ER

Question 2

What options do you have to resolve a conflict?

Answer 2

Consult with others. Either:

• appropriate persons in the form
• board of directors of the relevant organisation
• professional body or legal advisors
• if still unresolved and all possibilities exhausted then refuse to remain associated with the matter causing conflict, withdraw or even resign

Question 3

When can a professional accounts disclose confidential stuff?

Answer 3

When permitted by law and authorised by the client / employer

If required by law

If there is a professional duty to and not prohibited by law

Question 4

What factors should you consider when deciding to disclose confidential information?

Answer 4

• harm to interested parties
• all relevant information known and substantiated
• type of communication expected and to whom addressed
• whether the information is privileged
• legal and regulatory obligations

Question 5

When about to start working for a second client who has links to a current client, what safeguards should be put in place to protect confidentiality and objectivity?

Answer 5

• tell both parties
• check they are happy to proceed with the arrangement
• separate teams
• physical / digital information barriers, i.e. teams based in different offices, files digitally secured for only the engagement team
• issue clear guidelines to the teams re: security and confidentiality
• use confidentiality agreements for employees and partners
• arrange regular reviews by a senior not involved in either engagement.

Question 6

What should you do prior to accepting any engagement?

Answer 6

• due diligence to establish areas of risk
• get directors identification documents to check they are who they say they are and keep copies
• send an engagement letter outlining scope of responsibilities
• speak to previous advisors to get professional clearance

Question 7

What are the requirements of GDPR?

Answer 7

• any data breach needs to be reported within 72 hours and can result in fines
• Data held is accurate and up to date
• data is processed lawfully, fairly and transparently
• kept in a form which permits ID of individuals for no longer than necessary
• adequate, relevant and limited to what is necessary for that purpose
• collected for specific, explicit and legitimate purposes and not processed further
• processed in a manner that ensures appropriate security of the personal data

Question 8

What should you do about a HMRC error in your clients favour that they don’t tell HMRC about?

Answer 8

• firstly should have included authority on engagement letter to notify HMRC about these kind of things
• next, if not seek clients consent to notify hmrc
• if declined, warn the client of the possibly legal consequences of not giving authority AND advise if authority not given then firm will cease acting for the client and notify hmrc that they have ceased acting for the client (without reasons why)
• ensure that written records of all advice given are kept
• consider withdrawing any reports signed such as audit reports if they are misleading
• consider whether a money laundering report should be made to the firm’s mlro
• consider carefully and respond to any professional enquiry letter

Question 9

Where a professional accountant suspects a client is involved in money laundering they should do what?

Answer 9

he should report this to his money laundering reporting officer or directly to the national crime agency via a suspicious activity report

DONT TIP OFF CLINET

Question 10

What anti money laundering procedures should a firm do?

Answer 10

1) register with appropriate supervisory authority
2) appoint mlro
3) train staff
4) establish internal procedures relating to risk assessment
5) customer due diligence on new clients and monitor existing clients
6) verify id of new clients and maintain evidence
7) report suspicions to NCa using sar

Question 11

What defences are there for failing to report suspicions?

Answer 11

• lack of training (this is an offence by the employer)
• privileged circumstances, e.g acting for a client in litigation
• reasonable excuse (extreme scenarios only)
• ml is not taking place in the uk and is not illegal in that country

Question 12

What are the five standards that must be observed by professional accountants when advising on tax planning?

Answer 12

• client specific - must be specific to the client and they must be alerted to the wider risks and implications of any courses of action
• ICAEW members must act within the law and draw clients attention to where the law is unclear
• the advice must not rely on relevant fact being withheld from hmrc
• arrangement must not be contrary to the INTENTION of the law
• arrangements must not be highly artificial or contrived
• timely record keeping is essential as to the rationale of advise

Question 13

What are the guiding principles that underpin a firms defence against have facilitated tax evasion?

Answer 13

• undertaking a risk assessment
• ensuring robust procedures are in place to prevent
• securing top level commitment from board and/or senior executives about the risks of exposure to the offences and the need for the business to respond
• perform due diligence
• communicate the offences in training
• monitor and review procedures