The Principles of Ethics Flashcards
What is the definition of Ethics?
The moral principles that govern a person’s behaviour or the conducting of an activity.
What is Business Ethics?
The application of ethical principles to the problems typically encountered in a business setting.
What factors affect ethical obligations?
The law, Government regulations, Ethical codes, Social pressure and Corporate culture.
According to the Institute Of Business Ethics, what three questions make up a simple ethical test for any business decision?
1) Transparency - Do I mind others knowing what I have decided?
2) Effect - Does my decision affect or hurt anyone?
3) Fairness - Would my decision be considered fair by those affected?
What are the fundamental principles that make up the Code of Ethics for Professional Accountants?
Integrity, Objectivity, Professional competence and due care, Confidentiality and Professional behaviour.
What is the definition of Integrity?
A member must be straightforward and honest in all professional and business relationships. Integrity also implies fair dealing and truthfulness.
What is the definition of Objectivity?
A member must not allow bias, conflict of interest or undue influence of others to override professional or business judgements.
What is “Independence of mind”?
The state of mind that permits the provision of an opinion without being affected by influences that compromise professional judgement, allowing an individual to act with integrity and exercise objectivity and professional scepticism.
What is “Independence of appearance”?
The avoidance of facts and circumstances that are so significant that a reasonable and informed third party, having knowledge of all relevant information, would reasonably conclude that a firm’s or a member’s integrity, objectivity or professional scepticism had been compromised.
What is the definition of Professional competence?
A member has a continuing duty to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques.
What is the definition of Due care?
A member must act diligently and in accordance with applicable technical and professional standards when providing professional services.
What is the definition of Confidentiality?
A member must, in accordance with the law, respect the confidentiality of information acquired as a result of professional and business relationships and not disclose any such information to third parties without proper and specific authority unless there is a legal or professional right or duty to disclose.
Confidential information acquired as a result of professional and business relationships must not be used for the personal advantage of the member or third parties.
What is the definition of Professional behaviour?
A professional accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession.
What are the possible threats to compliance with the fundamental principles?
Self-interest threat, Self-review threat, advocacy threat, familiarity or trust threat and the intimidation threat.
What do Safeguards do?
Eliminate or reduce threats to an acceptable level.
