... The process the chief accountant may ethically approach According to the “Code of Ethics for Professional Accountants”, a professional accountant should comply with the fundamental principles including integrity, objectivity, professional competence and due care, confidentiality, and professional behavior (S100.5). When the chief accountant identifies threats to compliance with the fundamental principles and those threats are not at an acceptable level (violation of HKAS 18), the chief accountant must decide whether appropriate safeguards can be available and applied to eliminate or reduce the threats to an acceptable level. During the decision making process, the chief accountant should exercise professional judgment and consider whether a reasonable and informed third party, and need to weigh all the specific facts and circumstances available (100.7). Threats can be classified into self-interest threat, self-review threat, advocacy threat, familiarity threat, and intimidation threat (100.12). In this case, the CEO instructs the chief accountant to defer the revenue recognition to next fiscal year therefore the chief accountant is facing intimidation threat which occurs when the chief accountant is deterred from acting objectively because of actual or perceived pressures, including attempts to exercise undue influence over the professional accountant. During a formal or informal ethical conflict resolution process, the chief accountant should take into account...
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...ETHICS AND THE ROLE OF ACCOUNTANTS According to (Finn, 1994) ethical behaviour is a base which is required in the accounting profession to provide a proper and professional service to a client who just relies on the information provided by the accountant. This helps to build a reputation and in as well in the eyes of the client that the accountant is reliable and adds to their degree of trustworthiness for the client. The reason it has become so important to monitor the ethical behaviour of accountants is because of the recent scandals by corporate and accounting firms like Enron and WorldCom as mentioned by (Chan, 2006). It was further mentioned that ethical problems are a part of any business due to the interaction of the accountants with so many people with different interests that it leads to conflict of interests. Many different people have different views about ethics. The basic meaning of ethics is the authority of custom and tradition (Svensson, 2003). It was further stated that ethics is more of a mix of philosophical thoughts over a period of time as compared to being a fixed concept and each culture has its own norm of what is acceptable and what is not. Another view point by (Duska, 2011) stated that ethics is related to analysing what is right in the eyes of the person and the law. It consists of a set of moral principles that vary between individuals that distinguish between good or bad. While some of the ethical behaviour is implied, the professional framework...
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...A Presentation to PICPA, 20 March 200 “THE NEW CODE OF ETHICS FOR CPA’s” Atty. Eranio L. Punsalan Chairman Ethics Board Philippine Institute of Certified Public Accountants PICPA New code of ethics for CPAs y Atty. Eranio L. Punsalan A Presentation to PICPA, 20 March 200 Agenda Code of Ethics for Professional Accountants in the Philippines Modifications to the IFAC Code to consider Philippine regulatory requirements and circumstances Contents of Code of Ethics for Professional Accountants in the Philippines Code of Ethics for Professional Accountants in the Philippines y Atty. Eranio L. Punsalan A Presentation to PICPA, 20 March 200 Code of Ethics for Professional Accountants in the Philippines What is the Code? • It is a 105-page document, 80% of which cover independence rules and interpretations. Effectively superseding the old code which was issued by the PRC & BOA in 1978. • It is based on IFAC’s International Code of Ethics for Professional accountants (with minor modifications). • It demonstrates PICPA’s (as member of IFAC) commitment to IFAC’s broad objective of developing and enhancing a coordinated worldwide accountancy profession with harmonized standard.
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...begin moving forward into rolling out an accounting department ethics program. The program will include a detailed Code of Ethics, an Ethics Training class for all employees, an Ethics Help-Line where employees can anonymously report any violations of the Code of Ethics, periodic evaluations, and a method of monitoring and tracking systems. The business benefit of these programs will help manage values and help maintain moral course in rustled times. This program cultivates strong teamwork and productivity along with helping...
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...look Code of Ethics, based on the international Federation Accountants’ code, will ensure that New Zealand Charted Accountants meet their ethical responsibilities. Within this essay an adverse position will be taken towards the previous statement. The international Federation of Accountants (IFAC) states that, professional standards and the code of ethics form important benchmarks that should be met by practicing accountants. Accountants should understand and apply them when conducting any type of work (Pickett 2005). The New Zealand Institute of Charted Accountants (NZICA) is a member of IFAC, as part of its member obligations NZICA has to apply the same standards as IFAC (nzica) . This is how the previous statement arises, due to IFAC recently going through a major revision of the code in the area of independence. (nzica) .This essay will appoint different issues and concerns about adopting a new code of ethics and how this change will actually affect the society. Such points are; personal moral judgment, ethical education being a factor of ethical responsibilities and unclear types of enforcement and points of the Code of Ethics. “Good ethics, whether at work or home, demands self-knowledge, Whereas some groups want to see ethics as a skill or a particular part of organizational transformation, practising good ethics ultimately comes down to you and how you make decisions.”(6). Moral judgment is unique to any individual, adjustments to the NZICA Code of Ethics will not provide...
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...Malaysia ETHICS IN ACCOUNTING EDUCATION: CONTRIBUTION OF THE ISLAMIC PRINCIPLE OF MAêLAîAH Abdul Rahim Abdul Rahman Assistant Professor, Department of Accounting, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Jalan Gombak, 53100 Kuala Lumpur, Malaysia. (e-mail: abdulrahim@iiu.edu.my) ABSTRACT There is a growing concern over the apparently low moral standards of some accountants and an increasing number of academics who suggest that the education system should bear some of the blame. Ethical components in accounting education have been found to be insufficient and there is a lack of emphasis on humanizing accountants. The objective of this paper is firstly to address the importance of ethics in accounting education and evaluate the development of literature in this area. Secondly, the paper argues for the direction of accounting education to focus on religious ethical development and values in developing accounting ethics. The paper argues that the Islamic worldview and ethics perspective can provide some insights into the process of developing a more humanized and ethical accountant. This paper proposes the Islamic legal principle of ma§laúah as an ethical filtering mechanism to be taught as part of the ethical accounting education process. This is aimed at providing awareness to accounting students and accountants on the process to resolve ethical conflicts. The study of Islamic worldview and ethics provides ...
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...ETHICS Introduction The behaviour of the practicing management accountant is prescribed and regulated by the management accountant's personal code of ethics, the code of ethics of the employer, societal norms, and the law. In addition members of the Society are regulated by the Society's code of ethics. As more organizations adopt codes of ethics, management accountants will increasingly be asked to design systems to control, evaluate, interpret or apply ethical judgement. The following develops the basis for forming ethical judgements. The management accountant fulfils four broad roles concerning ethics: 1. to ensure that management has developed and installed a comprehensive and internally controlled code of ethics. 2. to verify that the code of ethics and its controls are comprehensive and that everyone in the organization understands and complies with it. 3. to report to management any deviation from the code of ethics and its control systems. The Board of Directors may ultimately have to address any failures in the code or its controls. 4. to act in accordance with the code of ethics in making personal decisions. What are Ethics and Morals? Ethics are the rules people use to define and regulate moral behaviour. Morals distinguish right from wrong. Descriptive ethics are codes of ethics as actually practiced. Descriptive ethics provide no value judgements. Normative ethics, or moral reasoning, develops statements about whether a practiced ethical system is good or bad...
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...look Code of Ethics, based on the international Federation Accountants’ code, will ensure that New Zealand Charted Accountants meet their ethical responsibilities. Within this essay an adverse position will be taken towards the previous statement. The international Federation of Accountants (IFAC) states that, professional standards and the code of ethics form important benchmarks that should be met by practicing accountants. Accountants should understand and apply them when conducting any type of work (Pickett 2005). The New Zealand Institute of Charted Accountants (NZICA) is a member of IFAC, as part of its member obligations NZICA has to apply the same standards as IFAC (nzica) . This is how the previous statement arises, due to IFAC recently going through a major revision of the code in the area of independence. (nzica) .This essay will appoint different issues and concerns about adopting a new code of ethics and how this change will actually affect the society. Such points are; personal moral judgment, ethical education being a factor of ethical responsibilities and unclear types of enforcement and points of the Code of Ethics. “Good ethics, whether at work or home, demands self-knowledge, Whereas some groups want to see ethics as a skill or a particular part of organizational transformation, practising good ethics ultimately comes down to you and how you make decisions.”(6). Moral judgment is unique to any individual, adjustments to the NZICA Code of Ethics will not provide...
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...Assignment Week 4 Code of Ethics Name Devry University Accounting 525 Veliota Drakopoulou, PhD 01/30/2016 Abstract The American Institute of Certified Public Accountants (AICPA) has made a Code of Professional Conduct that establish an ethical standard for public accountants in the US. The Generally Accepted Accounting Principles (US. GAAP) wants to collaborate with IFAC in order to resettle the principle accounting standards, but the rules and the ethics for professional and the financial reporting statements make a big difference. According to the article “It's Time for Principles-Based Accounting Ethics”, the American Institute of certified public accountants (AICPA) established standards that public accountants in the United States need to follow. The article argues for this code of conduct to be replaced with a code of ethics, which the authors believe to be superior to the rules-based standards currently in place, and attempts to present a solution by centering the AICPA code rules around different virtues such as objectivity, integrity, inquisitiveness, loyalty, and trustworthiness and analyzing the rules-based standards. This paper will argue whether the authors are correct in stating that a code of ethics should do more than establish minimum acceptable standards; describe the five cardinal virtues of professional accountants; differentiate between the rules-based and principles-based accounting standards; and finally compare and contrast the AICPA’s code...
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...creates the question on practice of ethics in professional activities. The purpose of this report is to review Threats to Compliance with the Code of Conduct by Professional Accountants. With the expanding business in the modern world, issues arise on professionalism of Independent and Internal Auditors. Is it whether the Professional Accountants follows the ethical code provided by the International Ethics Standards Board for Accountants in order to provide true and effective financial reports to the internal and external users? Professionals are expected to conduct themselves at a higher level than most others members in the organization. The International Accounting Bodies has emphasized the conceptual...
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...ethical issues in financial accounting, I picked this subject because I believe that having good morals and ethics is the mainstay of life in general, But in finance and accounting it is very important to have this to be successful in business, which is based on personal, professional and corporate issues that will arise in day to day operation. Introduction Accounting is the profession of Analyzing, collection, recording and posting financial transactions in a manner to provide useful information essential to making financial decisions by leaders in a business or organization. Accounting is also called the language of business. The financial statements are used to communicate the effects of the operation and financial strength of a business or organization. By making comparisons of statements from a company from year to year, a professional could be able to predict the profitability, direction and financial condition of a business or organization (Juan, 2007). It is important that the accounting practice is immune to greed and selfishness, and should be a free emotional reporting function which requires a skillset to handle complex technical skills but have no moral involvement. People think on most financial issues or scandals are problems of disloyalty and distrust (Senaratne, 2011). Can we trust those who run the finances in today’s world? Can Accountants, auditors, bankers can be trusted? Yet when an issue is not of blatant mistrust, answering this requires...
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...Accounting ethics is primarily a field of applied ethics and is part ofbusiness ethics and human ethics, the study of moral values and judgments as they apply to accountancy. It is an example of professional ethics. Accounting introduced by Luca Pacioli, and later expanded by government groups, professional organizations, and independent companies. Ethics are taught in accounting courses at higher education institutions as well as by companies training accountants and auditors. Due to the diverse range of accounting services and recent corporate collapses, attention has been drawn to ethical standards accepted within the accounting profession.[2] These collapses have resulted in a widespread disregard for the reputation of the accounting profession.[3] To combat the criticism and prevent fraudulent accounting, various accounting organizations and governments have developed regulations and remedies for improved ethics among the accounting profession. ------------------------------------------------- Importance of ethics The nature of the work carried out by accountants and auditors requires a high level of ethics. Shareholders, potential shareholders, and other users of the financial statements rely heavily on the yearly financial statements of a company as they can use this information to make an informed decision about investment.[4] They rely on the opinion of the accountants who prepared the statements, as well as the auditors that verified it, to present a true and fair...
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...Organization, 2011 Received: April 21, 2011 Accepted: June 10, 2011 Published: August 20, 2011 Ethical Compliance by the Accountant on the Quality of Financial Reporting and Performance of Quoted Companies in Nigeria 1 G.N. Ogbonna and 2Appah Ebimobowei Department of Accounting, Faculty of Management Sciences, University of Port-Harcourt, Port-Harcourt, Nigeria 2 Department of Accounting, Bayelsa State College of Education, Okpoama, Brass Island, P.M.B. 74 Yenagoa, Nigeria 1 Abstract: The study investigates the ethical compliance by the accountant on the quality of financial reporting and performance of quoted companies in Nigeria. Five hypotheses guided the study. The sample for the study which was twenty companies from five sectors quoted in the Nigerian Stock Exchange. They were systematically and purposively selected from the number of quoted companies in the exchange. A five point scale questionnaire was used with items on ethical issues on organizational financial reporting and performance. Data was analyzed using descriptive statistical tools and Spearman Rank Order Correlation Coefficient. Findings suggest that the compliance by the accountant positively and significantly affect the quality of financial reports and performance of organizations. The conclusion drawn from the findings is that the compliance by the accountant on professional ethics of integrity, objectivity, honesty, compliance and accountability will improve the quality of financial reports and the...
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...Ethics is more than simply the pursuit of goods; is also about fidelity to ethically acceptable relationships. A crucial relationship is that of a professional towards his or her client. Because accounting is a skill that demands expertise, and because accountants have clients’ who depend on that expertise, accounting can be included among the professions. Accounting ethics in the field of accounting refers to the guidelines (consisting of judgments and moral values) that a professional needs to follow while practicing accounting. People using the service of accounting professionals rely on their professional competency to take decisions and in the process also relies on the ethics followed by them. Roles an Accountant can fulfill Although accountant’s primary purpose is to present a picture of an organization’s financial affairs, accountants play many other roles: 1) Auditing- the most important role is the role of an independent accountant (auditor). The auditors function is that the organizations estimate are based on formulas and those formulas are applied consistently year to year- thus to ensure reasonable and consistent application. 2) Managerial Accounting- In house role of accountant is to give most accurate picture of the organizations economic state so that company can flourish. The account’s main responsibility is to the company, but if the companies’ board, managers and share-holders are at cross purpose, the accountant is conflicted. This conflict forms the ground...
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...IFAC’s recently released Revised Code of Ethics applies to all professional accountants - whether you work in practice, in industry, in academe, or in government. It is effective from June 30, 2006. Accountancy Ireland asked ICAI member, Richard George, Chairman of the IFAC Ethics Committee to explain the background to the development of the revised code and to give our readers a brief overview of what it covers. Many Irish Chartered Accountants are probably only vaguely aware of the existence of IFAC - the International Federation of Accountants - as a global body that sets professional standards for the accountancy profession and of which their Institute is a member. A much smaller number would have any detailed knowledge of what these professional standards cover or of how they impact on local requirements as promulgated by their own Institute. This article is about ethical matters and the activities of the IFAC Ethics Committee. Besides ethics, IFAC Boards and Committees develop international standards on auditing and assurance (ISAs), on education and on public sector accounting. Each of the member bodies of IFAC - there are 163 currently from all parts of the globe - undertakes to use their best endeavours, subject to national laws and regulations, to implement the standards issued by IFAC in each of these fields. So, ICAI - and indeed, the other UK and Irish based accounting bodies that have members in Ireland - have obligations to promulgate IFAC standards and to monitor...
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