Principles of professional ethics Flashcards
What are the professional ethics of an organisation ? P95
- Moral principles / standards
- conduct of members of organisation
What are members of professional bodies expected to do within an organisation ? P95
- Maintain standards of organisation
- behave ethically & professionally
- orgnaisational rules & guidlines - section for professional ethics
How does the AAT help accoutants maintain high professionalism ? P95
- Publication - code of professional ethics
- Based on international ethics stnadards board for accountants
What is the international ethics stanrds board of accountants ? P95
- sets global ethical standards
- part of international federation of accountants
What type of obligation is compilance with ethical code ? P95
- Professional obligation
- not legal obligation
What is the code of professional ethics within the AAT designed to do, and what does it specifically state ? P95
- Help decision - ethical implication
- outline standard of professional behaviour
- public interests protection
- AAT - good reputation maintenance
Who does the AAT code of ethics apply to ? P96
- Fellow members
- full members
- affiliate members
- students
What are the three consecutive parts that the AAT code of professional ethics have been divided into ? P96
- Part A - All members
- Part B - Members in practice
- Part C - Members in business
What is a professional accountant required to comply with , and what is this thing’s relationshipo with ethical issues ? P97
- 5 fundamental principles
- Professional ethics issue - affects - number of principles
What are the five fundamental principles ? P97
Popular People Chat In Offices
Professional behaviour
Professional competence and due care
Confidentiality
Integrity
Objectivity
What is integrity ? P97
- Quality- Honesty & strong moral principles
- straightforward & honest - professional & business relationships
- non-integral = misleading info association
- resulting no trust
What are the three key ethical values contributing to the fundamental principle of integrity ? P97
- Honesty
- Transparency
- Fairness
What is objectivity ? P98
- Decisions making - real facts
- not personal belief / feelings
- bias, conflict, undue influences of others - professional . business judgement
What does the principle of objectivity work with ? P99
- Independence
- freedom of control/influences of others
What is the need for an accountant to appear to be objective ? P100
- Addition to objecitvity + independence
- reasonable person:
- independent behaviour
- avoid objectively behaviour into question
What is professional competence and due care requirment ? P100
- To - professional knowledge and skill maintenance
- competent professional service - developments - pracitce, leiglsation , and techniques
What is professional competence ? P101
- Requirement - keep up to date
- CPD Regular basis
- reading current information - technical development in profession
- attendance - relevant training courses
What is an example of a professional competence need ? P101
- international accounting standards
- update technical knowledge- professional body training courses
- failure = error in work , disciplinary action
What is due care ? P101
- Appropriate carte = quality of work meets high standards
- means - accordance with requirement of tasks: carefully, thoroughly, on timely basis
- assessement:
- importance
- time allowed to complete
- quick , but quality
What is confidentiality ? P102
- None disclosure - authority / legal duty
- obligation - respect confidentiality:
- client/ employer’s affairs
- employment gained / professional work
How must confidential information not be used ? P103
- Not used - own personal advantage/ third party - colleague , friend/ family member
- appear to use - not thinking they have
How long does confidential info obtained through employment last ? P104
After employment
When is it acceptable for confidential information to be disclosed ? P104
- Authorised - client / employer
- legal disclosure
- professional duty to disclose
When a client/ employer gives authority to disclose, what should be made clear
- disclaimer:
- intended purpose- e.g. decision making
- info given with no financial reponsibility - yourself/firm
What are the two categories that disclosure required by law can be divided into ? P105
- evidence - Court of law
- law broken
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When may disclosure of infromation to give evidence in court be required ? P106
- Witness summons
- provision of documents - court evidence
- appear in court - give evidence
What should an accountant do if they’ve received court summons but their client has not given permission for disclosure? P106
- Disclose
- witness court summons pervails
When will an accountant be required to disclose information for an infringement of the law ? P106
- Client / employee breaks law
- e.g. money laundering
What is money laundering ? P107
- move illegally acquired cash
- financial systems
- legally acquired appearance
What is the act of money laundering in more detail ? P107
- Illegal activity = dirty money
- legitimate trade use/ investment activities
- washing money - clean/ legally obtained
What are the circumstances in which the accountant would have a professional duty to disclose information ? P107
- IFAC Quality review
- enquiry response - professional accounting body/ regulatory body
- accountant professional interests - legal proceedings
- technical standards and ethical requirements compilance
Why are accountants advised to seek professional / legal advice before disclosing confidential information ? P107
- decision to disclose- professional duty
- Difficult and complex area
What are the three points to consider before making a disclosure ? P107
- Facts and evidence - professional judgement
- authoritive recipient and communication
- legal consequence consideration
What if an accountant is unsure as to whether they should disclose confidential information and how much they should disclose ? p108
- legal contact- soliticor
- accounting body advice
What should an accountant do if there’s conflict between confidentiality principle and data protection laws ? PP108
- Do not disclose
- unless legally required
What does the principle of professional behavoiour do ? P108
- Required standards of behaviours set out
- guide of achievement
What are examples of non-adherence to the professional behaviour principle ? P108
- offensive and inappropriate emails
- professional advice - unethical/ criminal client
What usually happens if the accountant fails to adhere to the organisational values and intenral codes of practice ? P109
- Discplinary procedures
- should be formally documented
What will the discplinary procedures normally include ? P109
breach of an organisation’s values/ internal codes of practice
- Verbal warning
- written warning
- disciplinary warning
- appeal opportunity
- suspension
- dismissal
What will the extent disciplinary action taken depend on, if the accountant breaches an employer’s organisational values and internal codes of conduct ? P109
- Brech seriousness
- e.g.gift receiving = verbal warning
- fraud = dismissal
What happens if an accountant fails to live by the code of ethics set out by professional accounting bodies ? p109
- Disciplinary action
- individual accounting bodies
- financial reporting council
What are the two main categories that misconduct falls into ? P109
professional behaviour
- Accounting profession - disrepute
- rules and regulation breach - accountant’s professional body
How do individual accounting bodies in the UK address misconduct ? P109
- Published disciplinary regulations
- implement processes and sanctions - if guilty
- procedure - disciplinary investigation -> decision on guilty of misconduct
What penalties can individual accounting bodies in the UK impose on an accountant? P110
Professional behaviour
- Written undertaking - refrain from repear
- fined sum - upto max
- repirimanded/ severly reprimanded
- ineligible - practicing licence
- practicing licence withdrawal
- membership suspended
- professional accounting body - expulsion
What must accountants exercise when making professional judgements ? P110
- Professional secptism
- transaction recordings and financial reporting
What does professional sceptism include ? P110
- Questioning mind - question face value
- alert - mistakes - genuine / deliberate
- critical assessment of evidence
What does professional sceptism NOT mean ? P110
- Not everything false/ fraud
- vague = further investigatin
- failure = compromise objectivity = fraud and bribery accusation
What is fraud defined as ? P111
- Wrongful/ criminal deception
- result = financial / personal gain
What does the fraud act 2006 define the three classes of fraud as ? P111
- False representation - misleading representation
- failing to disclose information - non disclosure , legal duty
- abuse of position - safeguard financial interests of other , abuse
What does the bribery act 2010 define bribery as ? P111
- Giving , receiving something of value
- influencing recipient
- to do favourable to giver
What are the 4 key Bribery act offences ? P111
- Bribing another
- receiving a bribe
- bribing foreign official
- failure to prevent
What is the maximum penalty if a person is found guilty for the offence of bribery ? P112
- 10 years imprisonment / unlimited fine
- potential - property confiscation
