Chapter-08: Professional Ethics

01. What is a Profession and professional? (2-21)

Profession: A profession is a field of work that has been successfully professionalized. A
profession is a type of occupation or career that typically requires advanced education or
training in a specific field. Professions are characterized by specialized knowledge,
professional associations, service orientations, skills, and ethical standards. Examples:
medicine, law, engineering, accounting, teaching, and nursing.
Professional: A professional is an individual who is engaged in a specific profession and meets
certain criteria, including:
1. Possessing specialized knowledge, skills, and expertise in a particular field.
2. Adhering to ethical standards and codes of conduct associated with their profession.
3. Continuing education and professional development to stay current in their field.
4. Holding certifications, licenses related to their profession.

02. Professional Codes of Ethics: A code of ethics prescribes how professionals are to pursue
their common ideal so that each may do the best. The code is to protect each professional from
certain pressures by making it reasonable. A code is a solution to a coordination problem.

03. What are the types of Professional Ethics? (4-21)

1. Scientific Ethics: Scientific ethics define boundaries that dictate research. Scientific
ethics is a fundamental aspect of research that ensures integrity, honesty, and
responsibility in scientific activities. Many organizations require training in research
ethics. Typically, scientists and scientific researchers maintain highly ethical standards.
2. Judicial Ethics: The ethical standard of the legal community assist judges and attorneys
in upholding their independence and justice are known as judicial or legal ethics.
Professional ethics standards is also control by a judicial commission in each district.
3. Educational Ethics: Educational ethics refers to the moral principles and values that
guide the conduct and behavior of individuals in the field of education. It involves
making ethical decisions and choices related to teaching, learning, research, and overall
educational practices. Professional ethics provide environment in which all students may
get benefit and pursue a quality education.
4. Corporate Ethics: Corporate ethics, also known as business ethics, is all about the moral
principles and values that guide the behavior and decision-making of companies and
organizations. It involves conducting business in an ethical and responsible manner,
considering the impact on stakeholders, employees, customers, and the broader society.

04. Importance of Professional Ethics.

 First, professionals often have specialized knowledge and expertise, giving them an
informational advantage over those they serve. Professional ethics help identify potential
moral hazards and provide guidelines to navigate these situations, ensuring that
professionals act in the best interests of their clients or stakeholders.
  Second, professions are built on years of experience and knowledge. Professional ethics
serve as a repository of collective wisdom, that is passed on to new professionals.
Professional standards will keep the profession up-to-date of new ethical
responsibilities. This helps maintain high standards and keeps the profession up-to-date.
 Third, professional ethics act as a safeguard against undue influence and abuse of power.
They provide a framework for professionals to exercise their knowledge independently
and responsibly, free from external pressures or conflicts of interest.
 Fourth, as professional ethics are often established and enforced by professional
organizations. Violations of ethical standards can result in disciplinary actions, such as
loss of professional credentials or reputational damage. This helps maintain
accountability within the profession and ensures adherence to ethical guidelines.

05. Codes of Professional Ethics.

Information Systems Audit and Control Association (ISACA) sets this Code of Professional
Ethics to guide the professional. The code of professional ethics are as follows-
1. Supporting Appropriate Standards: Members should support the implementation and
encourage appropriate standards and procedures for the effective governance and
management practice. Such as audit, control, security and risk management etc.
2. Following Professional Standards: Members should perform their duties with
objectivity, due diligence and professional care in accordance with professional
standards.
3. Maintaining Stakeholders' Interest: They should serve in the interest of stakeholders
in a lawful manner, following the law and maintaining high standards of conduct without
harming their profession's reputation.
4. Maintaining Privacy and Confidentiality: Professionals must keep information
obtained during their work confidential, unless required by law. Such information shall
not be used for personal benefit.
5. Acquiring Competency: Professionals should continuously develop and maintain their
skills in their respective fields. They should only undertake activities that develop their
skill and knowledge.
6. Disclosing Material Facts: It's important for professionals to disclose all significant
facts they know. This promotes transparency and helps stakeholders make informed
decisions.
7. Providing professional education: Professionals should support stakeholders'
professional education to enhance their understanding of governance & related matters.
8. Taking Disciplinary Actions: If professionals fail to follow the Code of Professional
Ethics, their behavior may be investigated.

06. Professional Standards: All members must prove that they:

1. Act with integrity;
2. Act in a way that promotes trust in the profession
3. Always provide a high standard of service;
4. Treat others with respect; and
5. Take responsibility.
07. Differences between Personal and Professional Ethics.
Personal Ethics Professional Ethics
Professional ethics are a set of principles and
Personal ethics refer to the moral principles
standards that govern the behavior of
and values that individuals hold and apply to
individuals in their professional roles or
their personal lives.
occupations.
Includes your personal values and moral Rules imposed on an employee in a company
qualities. or member of a profession.
These ethics are shaped by personal beliefs, These ethics learn when they are being trained
cultural influences and individual or educated for working there.
experiences.
They are subjective and can vary from person They are objective and universally applicable
to person. within a profession.
Not conforming to these may harm you. Not adhering to these may harm your
professional reputation.
Examples: honesty, care, and sincerity. Examples: no gossiping, time management,
punctuality, confidentiality and transparency.

08. What are the fundamental principles of a professional accountant? (4-21)

International Federation of Accountants (IFAC) suggested that a professional accountant is
required to comply with the following fundamental principles:
1. Integrity: A professional accountant should be straightforward and honest in all
professional and business relationships.
2. Objectivity: A professional accountant should not allow bias, conflict of interest or undue
influence of others to override professional or business judgments.
3. Professional Competence and Due Care: A professional accountant has a duty to
maintain professional knowledge and skill at the sufficient level. A professional
accountant should act in accordance with professional standards when providing
professional services.
4. Confidentiality: A professional accountant should respect the confidentiality of
information. They should maintain the privacy and confidentiality of information
obtained in the course of their activities unless disclosure is required by legal authority.
Such information shall not be used for personal benefit.
5. Professional Behavior: A professional accountant should comply with relevant laws and
regulations and should avoid any action that discredits the profession.

09. What are the principles of professional conduct? (2-21)

Principles of the Code of Professional Conduct of the American Institute of Certified Public
Accountants (AICPA) guide the members to performance their professional responsibilities.
 Principle-1: Responsibilities: In carrying out their responsibilities as professionals,
members should exercise professional and moral judgments in all their activities.
 Principle-2: The Public Interest: Members should prioritize in serving the public
interest and demonstrate their commitment to professionalism.
  Principle-3: Integrity: Members should perform all professional responsibilities with
the utmost integrity to maintain and enhance public confidence.
 Principle-4: Objectivity and Independence: Members should maintain objectivity and
avoid conflicts of interest when fulfilling their professional responsibilities. A member
should be independent when providing auditing and other assurance services.
 Principle-5: Due Care: Members should adhere to the technical and ethical standards
of their profession, continuously improving their competence and the quality of their
services. They should fulfill their professional responsibilities to the best of their ability.
 Principle-6: Scope and Nature of Services: A member in public practice should
consider the Principles of the Code of Professional Conduct in determining the scope
and nature of services.

10. An Islamic Approach to Business Ethics.

1. Freedom of Enterprise: Individual in an Islamic society enjoys complete freedom in the
earning of his livelihood. He can start, manage and organize any kind of business
enterprise within the limits set by the Islamic Shari'ah.
2. Keenness to Earn Halal Earnings: Islam places great emphasis on the code of lawful
and unlawful in business transactions. Many Qur'anic verses disapprove the wrongful
taking of the property. Says the Holy Qur'an: "Do not devour another's property
wrongfully unless it be by trade based on mutual consent".
3. Trade through Mutual Consent: Mutual consent between the parties is a necessary
condition for the validity of a business transaction. A sale under pressure is not
acceptable in Islam. A sale transaction is to be regarded as legal only if it is made through
the mutual consent.
4. Truthfulness in Business Transactions: Islam encourages truthfulness in business
transactions and raises the status of a truthful merchant. The Prophet ‫ ﷺ‬is reported to
have said: "On the Day of Resurrection the truthful merchant is rewarded by being
ranked with prophets, martyrs and pious people".
5. Trustworthiness in Business Transactions: Trustworthiness is one of the most
important principles of ethical discipline in commercial transactions. Says the Holy
Qur'an: "O you believers! Do not betray Allah and the Messenger, nor knowingly, betray
your trusts".
6. Kindness and Tolerance in Business Transactions: One should be generous in
bargaining. Demanding debt back from the debtor should be in a decent manner. The
Prophet ‫ ﷺ‬said: "May Allah's mercy be on him who is compassionate in his buying,
selling, and in demanding back his money".
7. Honoring and fulfilling Business Obligations: Islamic teachings require a Muslim
trader to keep up his trusts, promises and contracts.
8. Fair Treatment of Workers: Islam encourages and promotes the spirit of love and
brotherhood between employer and employees. It is the religious and moral
responsibility of the employer to take care of the overall welfare and betterment of his
employees.
11. What are the prohibited matters in business transactions?
1. Dealing in Prohibited Haram Items: Dealing in unlawful items such as dead meat, pigs
and idols is strongly prohibited in Islam.
2. Sale of Al-Gharar (Uncertainty, Risks and Speculation): This term Al-Gharar denotes
the sale of goods or commodities that are uncertain, not present at the time of the
transaction, or quality is unknown.
3. Arbitrarily Fixing the Prices: Islam does not encourage the practice of price-fixing to
earn the profits. As a matter of principle public authorities are allowed to fix the prices
of commodities by force.
4. Hoarding of Foodstuff: It means storing foodstuffs or withholding them in expectation
of rise in their prices. Sometimes, a handful of traders buy the entire quantity of an item
and store it up with the object of selling it later at the time of scarcity to draw maximum
profit.
5. Exploitation of one's Ignorance of Market Conditions: One of the most common
unethical practices in modern business is taking advantage of someone's lack of
knowledge about market conditions.
6. Al-Najsh (Trickery): The term Al-Najsh means an action in which a person offers a high
price for something, without intending to buy it, but just to cheat or defraud another
person who really means to buy it.
7. Cheating and Fraud in Business Transactions: The traders and businessmen generally
have a tendency to motivate the customers by adopting fraudulent business practices.
Islam strongly condemns all such practices in business transactions.
8. Swearing (oath): The traders often take swear to emphasize that their items are of good
quality. They try to persuade the buyers to purchase their commodity by invoking Allah's
names.
9. Giving Short Measures: Another form of dishonesty is to manipulate weights and
measures. It refers to the act of taking full measures from others and giving them short
measures in your turn.
10. Dealing in Stolen Goods: It is not permissible for a Muslim to knowingly purchase or
sell stolen items.
#NOTE:

Atikuil Islam
Md. Mehedi Hasan Sikder
Department of Accounting and Information Systems
E-mail: [email protected]
[email protected]
Islamic University, Kushtia, Bangladesh.