Principles of professional ethics Flashcards
What is the definition of ethics?
Professional ethics of an organisation or moral principles that govern the conduct of members of that organisation
What code of ethics is the AAT code based on?
IESBA - International Ethics Standards Board for Accountants
Who does the AAT code apply to?
Part A applies to all members
Part B applies to members in practise
Part C applies to members in business
Name the 5 fundamental ethical principles?
Professional Behaviour
Professional Competence and due care
Confidentiality
Integrity
Objectivity
What is integrity?
Integrity is having honest, straightforward business relationships when carrying out professional work. Not acting with integrity means you will provide directly or indriectly misleading information.
Three ethical values: Honest, Tranceparency and fairness
What is objectivity?
Bases their opinion on real facts and not influenced by personal beliefs or feelings. Also when faced with a conflict of interest it is their duty to not let their own interest or other bias perusade their decisions.
What does objecitivty go hand-in-hand with?
Independance, this is freedom from control or influence from others.
What is professional competance and due care?
Maintain professional knowledge and skill at the level required to ensure a client or employer receives a competent service.
This means keeping up to date with developments in the accounting profession.
What is Confidentiality?
Professional work should not be disclosed without proper and specific authority or unless there is a legal duty to do so. Accountants must not use any info to their own personal advantage.
When can an accountant disclose confidential information?
When authorised by a clinet or employer
When disclousre is required by law
Professional duty to disclose
Name two categories when info is a legal requirement to disclose confidential info?
When the info is being used as evidence
When the law has been broken and the info has to be disclosed to the authorities.
What is money laundering?
To move illegal cash through financial systems so that it appears to be legal.
What points should be considered when deciding to disclose information?
All facts are known
Identify who the info is being disclosed to and how it should be communicated
Consider whether they would face legal concequences.
Explain professional behaviour?
Adpot professional behaviour to comply with relevant laws and regulations to avoid any action that brings the compnay into disrepute.
Explain the disciplinary procedures which an organisation would follow?
A verbal warning
A written warning
Disciplinary warning
Oppotunity to appeal
Suspension
Dismissal
What will happen to an accountant if they do not comply with the code of ethics
Disciplinary from the company
Professional accounting bodies expect their members to comply with the code of ethics, failure to do so will result in disciplinary action.
Name two categories which misonduct falls into?
Bringing the profession into disrepute
Breaching rules and regulations of the accounting body
What is professional scepticism?
A questioning mind
Making critical asessment of the evidence provided
Being alert to conditions
How is fraud defined?
Wrongful or criminal deception intended result in financial or personal gain
Name three types of fraud?
Fraud by false representation
Fraud by failing to disclose information
Fraud by abuse of position
What kind of approach does the AAT code of ethics state accountants should take?
Principles based approach
How does an accountant ensure their professional competance?
Must continue with CPD on a regular basis by reading current information or attending relevant training courses.
How can an accountant act with due care?
Meeting high standards of work
Produced in a timley basis
What is bribery?
Giving or receiving something of value with the intention of influnecing the receiver to do something favourable.
Name 4 key bribery acts?
Bribing another
Receiving a bribe
Bribing a foreign official
failing to prevent a bribery
What is the maximum penalty for bribary?
10 years imprisonment or an unlimted fine
