Module 2 Part A Flashcards
Ethics
What is right and what is wrong
Professional Ethics
Application of ethical principles and framework who has an obligation to act in the interest of those who rely on their services and to best interest of public
Ethical Principle
Integrity
Objectivity
Professional competence and due care
Confidentiality
Professional behaviour
Ethical responsibility by professional accountant
- exercise reasonable skills and diligence
- follow ethical standards and standards
- application of relevant knowledge and experience
- professional scepticism to ensure that any discrepancies are properly followed and investigated
Impact of ethical decision
Ethical reporting of poor financial position may lead to failure of organisation.
The investers will loose confidence on organisation
The creditors and suppliers my loose their monies
Still reporting ethically is important because the loss may be limited and action can be taken.
It is the right of stakeholders to know the true position of organisation
Impact of Unethical decision
If an product is sold to client which is not suitable for client and provide fraudulent document to earn more commission is unethical.
The financial advise will loose their job and regulatory registration
The regulators is empowered to request for correction in financial statements and at times the court may take action to penalise companies that have transgressed
Unethical behaviour can impact the whole profession and at individual level as well
Can result in loss of membership, fine and imprisonment
Accounting standards
A generally accepted set of principles for preparation and presentation of financial statements
Kidder philosophy of ethical dilemma
- Truth Vs loyalty
- Individual Vs group
- Short-term Vs long-term
- Justice Vs mercy
Contemporary ethical issues
AI
Sustainability
Greenwashing
Most frequently encountered ethical issues
misleading reporting
fraud & tax evasion
lack of transparency
breach of confidentiality
