Topic 19: Professional ethics Flashcards
What are Professional ethics?
Professional ethics (code of practice) are the personal and corporate rules that govern behavior within a particular organization or profession. They are professionally accepted standards of personal and business behavior. They use these rules as a guide to perform their jobs based on sound and consistent ethical principles.
Describe the 5 principles of professional ethics.
INTEGRITY — A professional accountant should be straightforward and honest in all professional and business relationships by demonstrating trust. Must deal with fairness and trustworthiness and not accept bribes to change the data they are presenting. Must not provide false or misleading information and must not omit any data.
OBJECTIVITY — A professional accountant should not allow bias, conflicts of interest, or the undue influence of others to override their professional or business judgment. They must not prepare the accounts of a family member or for a company that they have shares in.
PROFESSIONAL COMPETENCE AND DUE CARE — Accountants’ knowledge and skills must be of an appropriate level to provide professional service. They need to be qualified to the relevant standard. A professional accountant has a continuing duty to maintain professional knowledge and skill at a level required to ensure that clients or employers receive competent professional service based on current developments in practice, legislation, and techniques and act diligently and by applicable technical and professional standards.
CONFIDENTIALITY — A professional accountant should respect the confidentiality of information acquired as a result of professional and business relationships and, therefore, 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, not use the information for the personal advantage of the professional accountant or third parties. For example, you might need to pass on information to the government if companies are trying to deceive by paying less tax or laundering.
PROFESSIONAL
BEHAVIOUR — A professional accountant should c■nmply.with relevant laws and regulations and shall avoid any action that may discredit the profession.
What are Public Interests?
‘Interests’ are all things that are valued by society. This includes economic well-being and certainty in the business environment. Sound financial information must be given to stakeholders so that they are not misled and also proceed to comparisons. It also includes financial information that leads to the protection of the environment and reduces the depletion of natural resources.
What does it mean when Accountants ‘act’ in the public’s interest?
To act in the public interest means that accountants must work towards the highest levels of ethical and professional standards. Produce high-quality financial statements that are audited* to ensure accuracy. Must comply with the international code of conduct and must guarantee that there are rigorous checking systems. If they behave in an unethical manner; then are dealt through strict structures of disciplinary measures and sanctions
