Lesson 1: Intro to Professional Ethics Flashcards
What is the name of the global organisation for the accountancy profession?
International Federation of Accountants (IFAC)
What are the five fundamental ethical principles?
Integrity
Objectivity
Professional / technical competence and due care
Confidentiality
Professional behaviour
Which areas of accountancy require a special licence to practice?
External auditing
Investment business
Insolvency
What is a ‘rules based’ approach?
This approach establishes a set of rules for every possible situation and requires absolute adherence to the rules.
What is a ‘principles based’ approach?
This approach acknowledges that rules cannot foresee every type of ethical conflict. It offers guidelines that can be applied to individual circumstances.
What are the three main areas where it is acceptable to disclose confidential information?
When authorised to do so by the client or employer.
When the law requires that the information be disclosed.
Where there is a professional duty to disclose.
In the U.K., what is the name of the independent industry regulator?
The Financial Reporting Council (FRC).
It is responsible for creating a framework for the finance function. It also oversees the regulatory activities of the professional accountancy bodies and operates independent disciplinary arrangements for public interest cases.
What is the Accounting Standards Board (ASB) responsible for?
Responsible for establishing and improving standards of financial accounting and reporting for the benefit of users, preparers and auditors of financial information.
What is the Auditing Practices Board (APB) responsible for?
Responsible for setting standards and guidance for the performance of external audit and other activities that result in published reports that are relied upon by financial markets (assurances services).
What is the Board of Actuarial Standards (BAS) responsible for?
Sets the standards for the actuarial profession.
What is the Professional Oversight Board (POB) responsible for?
POB provides:
- independent oversight of the regulation of the auditing profession
- monitoring of the quality of the auditing function
- independent oversight of the regulation of the accountancy profession
- independent oversight of the regulation of the actuarial profession
What is the Financial Reporting Review Panel (FRRP) responsible for?
Carries out its responsibilities on behalf of the Secretary of State in relation to annual accounts and other documents falling within its remit.
Maintains a panel that includes a variety of senior level professionals in business, accountancy, law, etc. Those who come before panel know they are judged by their peers within the financial Reporting community.
Enquires into accounts falling within its remit which come to its attention, either by selection or by complaints.
Liaises with the Financial Services Authority to ensure the consistent application of accounting requirements and to improve the compliance of financial information with reporting requirements.
How are standards maintained?
Registering with a professional body
CPD
Code of ethics
What is the CPD cycle?
Assess: what skills do I have?
Plan: what skills do I need?
Action: carry out actions to gain skills from the plan stage
Evaluate: analyse whether new skills are sufficient or if more action is required
