ACCOUNTANTS & ETHICS for ACCA Personnel as well as for others..!!

1. ACCOUNTANTS & ETHICS

2. Accountants & Ethics
• Key reasons for expectation of ethical behavior of
accountants
– Ethical issues may be a matter of law and accountants
are expected to apply them
– The profession requires members to conduct
themselves and provide services to the public
according to certain standards
– The reputation of the profession and standing is
protected
– An accountant’s ethical behavior serves to protect the
public interest

3. APPROACHES TO ACCOUNTANCY
ETHICS
• Professionals, collectively share common
views and values
• Guidance from a governing body (regulatory
or professional body) clarifies the matter
regarding the expected professional behavior
• Such guidance is usually known as ‘code of
ethics’ or ‘code of conduct’

4. CODE OF ETHICS - ACCOUNTANTS
• The International Federation of Accountants
(IFAC) is an international body representing
the world wide major accountancy bodies
• Its mission is to help develop the high
standards of professional accountants and
enhance the quality of services provided

5. IFAC & ACCA
• IFAC code of ethics indicates a minimum level
of conduct for all accountants
• ACCA, as a member of IFAC, released its own
code of conduct, designed to align with IFAC
code
• The IFAC code is now administered by the
International Ethical Standards Board for
Accountants (IESBA)

6. ACCA CODE OF ETHICS & CONDUCT
• A member of ACCA is bound by the ACCA’s
Code of and Ethics and Conduct
• The fundamental principles of ACCA Code are:
– Integrity
– Objectivity
– Professional competence & due care
– Confidentiality
– Professional behavior

7. PERSONAL QUALITIES - ACCOUNTANT
• In meeting the fundamental principles, certain
qualities are expected of the member
• A student of ACCA is expected to develop
some personal and professional qualities to
meet the fundamental principles of the Code
of Ethics & Conduct

8. PERSONAL QUALITIES OF
ACCOUNTANTS
• Reliability – work should meet professional
standards
• Responsibility – take ownership of your work
• Timeliness – complete work within agreed time
frame
• Courtesy – conduct with courtesy and
consideration towards clients & colleagues
• Respect – recognizing the values & rights of others

9. PROFESSIONAL QUALITIES OF
ACCOUNTANTS
• Independence – handle work without prejudice
or bias and must be seen to be independent
• Skepticism – question information given to you,
and form your own opinion regarding quality and
reliability
• Accountability – be accountable for your own
judgments and decisions
• Social responsibility – have a public duty…audit
work, accountancy work, investment decisions
may impact the public

10. CONFLICTS OF INTEREST
• ACCA members should be aware that a conflict
between members’ and clients’ interests might
arise
– members compete directly with clients, or
– have a joint venture with a company that is in
competition with the client
• Members and firms should not accept or
continue engagements in which there are, or
likely to be, significant conflicts of interest
between members, firms and clients

11. • Members should evaluate the threats
arising from a conflict of interest
• They should apply safeguards like:
– Disclosure is the most important safeguard
– Using a separate team or signing
confidentiality agreements

12. THREATS TO ACCOUNTATS
• Self interest threat
• Self review threat
• Advocacy threat
• Familiarity threat
• Intimidation threat

13. SELF INTEREST THREATS
• ACCA code highlights a number of areas in
which self-interest threat to independence
might arise
Financial interest Close business Employment with Partner on Client Family and personal
relationships Assurance Client Board relationships
Recruitment Gifts and hospitality
Lowballing
High % of Fee % or contingent fee Overdue fees Loans & guarantees
Self Interest Threat

14. FINANCIAL INTERESTS
• Exists where an audit firm has a financial
interest in a client’s affairs, ex.,
– The audit firm owns shares in the client’s firm
– An audit firm is a trustee of a trust that holds
shares in the client’s firm

15. THANK YOU