Module 1 Part A Flashcards
Professional - Public interest and self-interest
- The efficiency of economist and society depends on disclosure of accurate financial and non-financial information
2 People who make significant decision rely on accurate accountants information. Thus an accountant should create and distribute clear information regarding an entity’s financial performance, financial position and other relevant issues - The accountant should be linked to idea of altruism (action that brings no benefit to an individual and may be at their own intrest). They should act with integrity, objectivity and without bias.
- Accountants should make decisions within systematic principles of framework like, governance, ethics and accountability.
Enlightened self Intrest
It is possible to commit to public interest at the same time possess self-interest. The phrase, doing well by doing good
Ideal of accounting profession
comprises of 4Es
1. Education
2. Ethics
3. Expertise
4. Entrepreneurship
Placing too strong emphasis on entrepreneurship and neglecting other Es will lead to de-professionalization of accounting.
De-professionalisation, the accountant will move away from integrity, objectivity, professional behavior in pursuit of commercial success
Attributes of profession
- Body of knowledge - This differentiate between professional and non-professionals. All professional skills and expertise should be supported by well founded body of knowledge. Range of skills both technical and soft skills should be supported by body of knowledge
- Education process- Theory studied in universities + practice gained during internship under the supervision of qualified accountant + continuous professional development required by accountants = Education process
- Ideal of service - the service of an accountant should be to serve the society. If the service is offered free of service is called pro bono. If the power is misused, the social contract will be breached and loose their identity in society
- Autonomy and independence - The professionals have their own rules and regulation and are less discipline by government regulation. The accountants power has been restricted due to their misuse by government.
Accounting professional + Government = Co-regulation - Code of ethics = 5 principles
Integrity
Objectivity
Professional competence and due care
Professional behavios
Confidentiality - Unique culture and ethos - differentiate one profession to another. Eg, CA, CPA
- Professional judgement - Ability to diagnose + ability to solve = professional judgement
- Governing bodies - the professional body act as governing bodies because prescribe the minimum requirements for membership and monitor continual development as professionals
Co- Regulation chart
watch step 8 webner 7.32 mins
Benefits to professionals
In exchange in providing their expert skills and knowledge, the professionals are rewarded with benefits like
self-regulation
autonomy
market control
economic rewards
Traditional view and market control
Traditional view - follows all 8 attributes of professionalism
Market control - The accountants are self-interested and less concern to public service.
They create a monopoly in order to ensure that only certain ppl can work in this area.
3 perspectives of service ideal
1.The well-being of the society
2.The pursuit of excellence
3.community services
Professional
Not all professionals are regulated by external bodies. While some are but not all. The accountant regulation is not strictly regulated by external bodies, because this would place an undue constraint on exercising professional judgement. This profession has moved from self-regulation to co-regulation with external bodies
Professional Judgement
The key is the ability to diagnose and solve complex and unstructured value-based problem which arises during their professional practice.
The professional ppl should have the awareness of uncertainty, complexity, instability, uniqueness and value conflict during their profession.
Governing body
Governing body has the responsibility to ensure that all professional attributes are achieved and maintained and that the professional body and professionals are successful
Role of governance body
- Speak for professionals, especially in public policy matters, where the professional independence and autonomy are affected
- Ensure that the professional has acquired required knowledge and are upto date with accounting theory and practice
- Encouraging the setting of high standards for professionals
- Applying disciplinary action if the professional fail to observe professional standards
APESB
Accounting Professional and Ethical standard board is an independent body that sets the professional standards for accountants
On 4th Nov 2005, CPA Australia and ICAA announced the establishment of APESB to review and set code of ethics and professionals standards
CPA Australia, CA ANZ and IPA are member of APESB
APESB comprises of technical and secretariate to fulfil its role.
The technical board consists of 8 members including 2 from CPA and other representatives are from public sector, corporate sector, audit profession, academia and general public
AASB and AUASB report to FRC
Role of APESB
- Reviewing the ethical and professional standards on annual basis
- reviewing the implementation of new ethical and professional standards within 6 mths of issue
- referring the matters to secretariate for research, direction and amendment
- seeking comment of draft from public, professional body
- monitoring the effectiveness of professional and ethical standards
APESB Standards
APES 205 - accounting standards
APES 210 - auditing standards
Once you are CPA qualified profession, APESB will check once in 3, 5 or 7 years depending on complexity of practice.
