- Posted August 14, 2014 by
Howard Lapensohn Ethics in Professional Accountancy:
The general ethical standards of society apply to people in professions like medicine, law, nursing and accounting, etc., as much as anyone. However society places even higher expectations on professionals. People need to have confidence in the quality of complex services provided by professionals
Ethics in the accounting profession are invaluable to accounting professionals and those who rely on their services. Stakeholders, including clients, credit grantors, governments, tax authorities, employees, investors, financial affairs and community etc perceive them as very competent, reliable, objective and neutral people. Professional accountants must not only be well qualified but also possess a high degree of professional integrity. Due to these high expectations, professionals have adopted codes of ethics, also known as professional codes of conduct. These ethical appeal to their members to maintain a level of self-discipline that goes beyond the requirements of laws and regulations codes. Howard Lapensohn Each of the major professional association for accountants has a code of ethics.
As mentioned earlier, professional accountants can be of two types. One who work in firms or independently managed companies that provide accounting, audit and other advisory services to clients: they are called public practitioners. The others are those who are employees of organizations and may serve as internal auditors, management accountants, financial managers and financial analysts. Whatever the role of accountants, they are adhered to the code of ethics that apply to their professional conduct, although there are some special provisions for those in public practice [Reference: Code of Ethics for Professional Accountants-International Federation of Accountants (IFAC)].
The objective to this code of conduct is to harmonize these standards and practices in a global perspective. Public can not trust these professionals highly when it is mandatory to observe and follow strict rules and codes in the world. A professional accountant is required to meet the following basic principles outlined in this Code of Ethics: [Ref: Section 100.4 of the Code of Ethics for Professional Accountants]
Integrity: A professional accountant should be honest and straightforward in all professional and business relationship.
· Objectivity: A professional accountant should not allow bias, Howard Lapensohn conflict of interest or undue influence of others to override professional or business judgments.
· Professional Competence & Care: A professional accountant has a continuing duty to maintain professional knowledge and skills to the level required to ensure that a client or employer receives competent professional service. A professional accountant should act diligently and in accordance with the technical and professional standards in providing professional services.
· Confidentiality: A professional accountant should respect the confidentiality of information obtained as a result of professional and business relationships and should not disclose such information and even to third parties without proper and specific authority unless there is a legal or professional right or the duty of disclosure. This information should not be used for personal purposes by a professional accountant.
· Professional Behaviour: A professional accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession.
This Code of Ethics has examined in detail the role of Chartered Accountants in given situations. For example, there are clear guidelines on the prohibition of accepting gifts, Howard Lapensohn long association with clients, advertising the business name that exceed the prescribed limits, hold clients' money for no good reason disclosure of client files (except those authorized), the acceptance of fees offered by the customer that is less than that available in the market, etc.
After discussing in detail the importance of ethics in the accounting profession, we conclude the issue with this last note that accounting as a profession is acceptable and invoked when the opportunities to exercise professional judgment based on a foundation of ethics, it is broad but deep technical excellence and strategic awareness are exercised by a professional accountant. Only then can the public have confidence in the integrity of the profession.