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Code of Proffesional Ethics Lecture Study Notes

The document outlines the code of professional ethics for accountants, including learning outcomes related to ethical decision making, key aspects of codes of professional conduct such as guidance and protection of public interest, and examples of ethics principles for professional accountants, including integrity, objectivity, competence, confidentiality, and professional behavior. It also provides case studies to demonstrate how these principles would apply in practice situations that pose ethical dilemmas.

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26 views

Code of Proffesional Ethics Lecture Study Notes

The document outlines the code of professional ethics for accountants, including learning outcomes related to ethical decision making, key aspects of codes of professional conduct such as guidance and protection of public interest, and examples of ethics principles for professional accountants, including integrity, objectivity, competence, confidentiality, and professional behavior. It also provides case studies to demonstrate how these principles would apply in practice situations that pose ethical dilemmas.

Uploaded by

lnghiilwamo
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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CODE OF PROFESSIONAL

ETHICS
LEARNING OUTCOMES
• Analyse contentious and contemporary issues related to accounting profession from
ethical perspectives in South Africa, Namibia and internationally;
• Explain appropriate decisions on issues involving ethical dilemma;
• Explain the ethical guidelines contained in the codes regulating the conduct of
accountants and auditors, and apply such guidelines to practical situations.
• Illustrate a sound introductory understanding of the ethical dimension of individual
and social life experiences within the context of cultural diversity;
• Explain the five primary theoretical perspectives that can be used to make better
ethical decisions;
• Apply ethical decision-making strategies, for instance in case studies;
• Explain selected socio-economic ethical issues applicable to business and in
professional practice;
• Analyse case studies in the accounting profession with reference to decision-
making, comparative ethics and diverse ethics (where applicable).
WHAT IS THE CODE OF ETHICS

• A code of ethics establishes the ethical requirement for members of the


profession, to which members adhere to.
• As a consequence of the professional status and unusual degree of
autonomy they enjoy , professionals have a responsibility towards public
interest and wellbeing of the society whom they serve.
• A code of professional ethics facilitates accountability, responsibility and
trust among professionals to the individuals/ society whom they serve.
• Each professional body in the accounting field has its own code of
professional ethics, most of these bodies are members of IFAC.
WHAT ARE THE FUNCTIONS OF THE CODE
OF PROFESSIONAL CONDUCT (CPC)
1.Guidance on proper conduct for professionals

2.Adherence to the Code assists in protecting public interest

3. Rationale for adherence even when pressured to violate the code of ethics or
moral conduct
WHAT ARE THE FUNCTIONS OF THE CODE
OF PROFESSIONAL CONDUCT (CPC)
4. Providing a mechanism by which action can be taken against ethical conduct
of professionals

5. Achieving the objectives of the profession-objectives of the profession are to


work to the highest standards of professionalism. (Credibility, Professionalism,
Quality of services and Confidence)

6. The code provides a basis for debate about future changes and improvements
to ethical standards
DISSEMINATION AND ENFORCEMENT OF
PROFESSIONAL CODES OF ETHICS
• Available on websites of professional bodies
• Professional bodies and regulatory bodies have an oversight role.
IFAC- CPC
ETHICS FOR PROFFESIONAL
ACCOUNTANTS

• INTEGRITY
• OBJECTIVITY
• PROFESIONAL COMPETENCE AND DUE CARE
• CONFIDENTIALITY
• PROFESSIONAL BEHAVIOUR
CASE STUDY 1
SCENARIO ANALYSIS-CONFIDENTIALITY

• During the course of your audit , for one of your clients in the
pharmaceutical industry you come across a report of clinical trials on a new
drug that the company has introduced, the report states that the drug has
many side effects, i.e a risk of injury to the user that could pose more harm
than good.

Do you think as an auditor you have public interest to disclose this and
potentially save lives?
PROFFESIONAL BEHAVIOR
• The principle of professional behavior imposes
an obligation on all professional accountants
to comply with relevant laws and regulations
and avoid any action that the professional
accountant knows or should know may
discredit the profession.
• This includes actions that a reasonable and
informed third party, weighing all the specific
facts and circumstances available to the
professional accountant at that time, would
be likely to conclude adversely affects the
good reputation of the profession
• In marketing and promoting themselves and their work, professional accountants shall
not bring the profession into disrepute.
• Professional accountants shall be honest and truthful and not: (a) Make exaggerated
claims for the services they are able to offer, the qualifications they possess, or
experience they have gained;
• or (b) Make disparaging references or unsubstantiated comparisons to the work of
others
THREATS TO FUNDERMENTAL
PRINCIPLES
• 1. Self Interest
• 2. Self review
• 3. Advocacy threat
• 4. Familiarity threat
• 5. Intimidation threats
SASKOM
Disclaimer: All names of persons, places and business entities mentioned in this
SCENARIO
scenario are fictitious and any resemblance to real persons, living or dead,
places and business entities is purely coincidental
Conceptual Framework

• Accountants are required to


1.Identify threats to compliance with fundamental principles
2.Evaluate the significance of the threats identified
3.Apply safeguards , when necessary , to eliminate the threats or reduce them
to an acceptable level

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