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3 views

ETHICS1

Uploaded by

saifeee1024
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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ETHICS

Key Concepts

• How do the rules fit together.

• Codes of ethics for accountants.


How do the rules fit together

There are three main sources of rules that regulate behaviour of

individuals and businesses These are:

1. The law

2. Non-legal rules and regulations (internal policies of a company)

3. Ethics
Approaches to Ethics

• Egoism approach. Is favorable for your self only.

• Utilitarianism approach. Greatest good for the greatest number of


people

• Pluralist approach. Is favorable for every one


`
• Relativism. Ethical decisions are according to the situation or condition
• Absolutism. unchanging set of ethical principles that will apply in all situations at
all times and in all societies
• Deontological ethics. Deontology in ethics focuses on moral duties and principles
rather than the consequences of action. It emphasizes following ethical rules and
obligations.
• Normative ethics. Normative ethics is a branch of ethics that deals with
determining what is morally right or wrong. It provides frameworks and theories
for evaluating and guiding human behavior.
Professional Ethics
Codes of Ethics for Accountant

• Integrity (straightforward and honesty)

• Professional competence and due care (update your knowledge with current

development and legislations)

• Confidentiality (not disclose any legal information)

• Professional behavior (comply with law and avoid any action which discredits the

profession)

• Objectivity (avoid bias(no discrimination), conflict of interest, undue influence)


• Conflict of interest . A conflict of interest is a situation in which a person or
organization is involve in multiple interest financial or non financial and serving
one interest could involve working against another
Personal Qualities of an Accountant

• Reliability

• Responsibility

• Timelines

• Courtesy

• Respect
Professional Qualities of an
Accountant
• Independence(your decisions should be independent)

• Skepticism (to create a negative thinking)

• Accountability (answerable for your decisions and actions)

• Social responsibility (public duty is give true and fair view about

the compnay)
Dealing with Unethical or illegal
conduct
• The accountant should first consult with whoever is responsible

for governance or ethics within the organization. This may be a

Compliance Officer, or the board of directors themselves.

• If the problem remain unresolved, the accountant should take

legal advice and or advice from their professional body (e.g.

ACCA)
• If the situation still cannot be resolved, the accountant should

consider reporting to the relevant authorities(govt authorities)

and withdrawing from the engagement.


Ethical threats & Dilemmas
• Self-interest threat – the threat that a financial or other interest will
inappropriately influence the professional accountant's judgment or behaviour.
• Advocacy threat Occurs when the audit firm, or a member of the audit team,
promotes, or may be perceived to promote, an audit client's position or opinion.
acting as an advocate on behalf of an audit client
• An intimidation threat exists if the auditor is intimidated by management or its
directors to the point that they are deterred from acting objectively.
• Familiarity threat ─ the threat that due to a long or close relationship with a client
or employer, a professional accountant will be too sympathetic to their interests .
• A self-review threat exists if the auditor is auditing his own work or work that is
done by others in the same firm.
Ethical problems facing Managers

• Extortion(unethical and illegal as well)meaning of extortion is the

practice of obtaining something, especially money, through force or

threats.

• Bribery (unethical and illegal as well)

• Grease money(legal, allowed but this is somehow unethical)

• Gifts
Managing Ethics

• Compliance-based approach. Is designed to ensure that the

company act with in the letter of the law and the violations are

prevented, detected and punished

• Integrity-based approach. Concern for the law with an

emphasis on managerial responsibilities for ethical behavior.


Whistle blowing

• is the disclosure by an employee of illegal, immoral or

illegitimate practices on the part of the organisation. This may

appear to be in the public interest, but confidentiality is very

important in the accountants' code of ethics. Whistle-blowing

frequently involves financial loss for the whistleblower.


Safeguards against ethical threats

This can be easily remember using the acronym HOTTER

• Honesty. Employees should encourage to be honest

• Openness. Organisation should freely provide information to

stakeholders.
• Transparency. Company makes it easy for stakeholders to review its activities
• Trust. Organisation should be trust worthy in their dealings.
• Empowerment. Give e power to employees for decision making
• Respect . All employees and stakeholders should be treated with respect
Corporate Code Of Ethics

A code of ethics documents may outline the mission and value of the business

or organisations, how professionals are supposed to approach problems. the

ethical principles based on organization’s core values and standards to which

the profession is held. There is no standard list of corporate code of ethics it

may vary from company to company but typically include integrity, honesty,

customer focus. Many organisations appoint ethics officers (also known as

compliance officers)

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