Principles of professional ethics

Question 1

What is the definition of ethics?

Answer 1

Professional ethics of an organisation or moral principles that govern the conduct of members of that organisation

Question 2

What code of ethics is the AAT code based on?

Answer 2

IESBA - International Ethics Standards Board for Accountants

Question 3

Who does the AAT code apply to?

Answer 3

Part A applies to all members
Part B applies to members in practise
Part C applies to members in business

Question 4

Name the 5 fundamental ethical principles?

Answer 4

Professional Behaviour
Professional Competence and due care
Confidentiality
Integrity
Objectivity

Question 5

What is integrity?

Answer 5

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

Question 6

What is objectivity?

Answer 6

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.

Question 7

What does objecitivty go hand-in-hand with?

Answer 7

Independance, this is freedom from control or influence from others.

Question 8

What is professional competance and due care?

Answer 8

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.

Question 9

What is Confidentiality?

Answer 9

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.

Question 10

When can an accountant disclose confidential information?

Answer 10

When authorised by a clinet or employer
When disclousre is required by law
Professional duty to disclose

Question 11

Name two categories when info is a legal requirement to disclose confidential info?

Answer 11

When the info is being used as evidence
When the law has been broken and the info has to be disclosed to the authorities.

Question 12

What is money laundering?

Answer 12

To move illegal cash through financial systems so that it appears to be legal.

Question 13

What points should be considered when deciding to disclose information?

Answer 13

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.

Question 14

Explain professional behaviour?

Answer 14

Adpot professional behaviour to comply with relevant laws and regulations to avoid any action that brings the compnay into disrepute.

Question 15

Explain the disciplinary procedures which an organisation would follow?

Answer 15

A verbal warning
A written warning
Disciplinary warning
Oppotunity to appeal
Suspension
Dismissal

Question 16

What will happen to an accountant if they do not comply with the code of ethics

Answer 16

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.

Question 17

Name two categories which misonduct falls into?

Answer 17

Bringing the profession into disrepute
Breaching rules and regulations of the accounting body

Question 18

What is professional scepticism?

Answer 18

A questioning mind
Making critical asessment of the evidence provided
Being alert to conditions

Question 19

How is fraud defined?

Answer 19

Wrongful or criminal deception intended result in financial or personal gain

Question 20

Name three types of fraud?

Answer 20

Fraud by false representation
Fraud by failing to disclose information
Fraud by abuse of position

Question 21

What kind of approach does the AAT code of ethics state accountants should take?

Answer 21

Principles based approach

Question 22

How does an accountant ensure their professional competance?

Answer 22

Must continue with CPD on a regular basis by reading current information or attending relevant training courses.

Question 23

How can an accountant act with due care?

Answer 23

Meeting high standards of work
Produced in a timley basis

Question 24

What is bribery?

Answer 24

Giving or receiving something of value with the intention of influnecing the receiver to do something favourable.

Question 25

Name 4 key bribery acts?

Answer 25

Bribing another
Receiving a bribe
Bribing a foreign official
failing to prevent a bribery

Question 26

What is the maximum penalty for bribary?

Answer 26

10 years imprisonment or an unlimted fine