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Ethics > Ethics Ch 4 + 5 > Flashcards

Ethics Ch 4 + 5 Flashcards

1
Q

Professional competence

A

The necessary skills and expertise to carry out existing and new work to the required professional standard

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2
Q

Professional journals

A

Magazines published by the professional accounting bodies in the uk, which include uptodate info on current accounting practice.
Including, current accounting practice, taxation, auditing.

Including links to websites, accounting and business (ACCA), economic (ICAEW), financial management (CIMA), public finance (CIPFA), accounting technician (AAT)

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3
Q

Continuing professional development (CPD)

A

The way in which accountants maintain their knowledge and skills to ensure that they remain professionally competent

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4
Q

Professional negligence

A

Occurs when a client, to whom an accountant owes a duty of care, suffers a financial loss that can be proved to be the fault of the accountants

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5
Q

Professional indemnity insurance

A

Insurance that an accountant takes out to cover an damage they may have to pay a client to professional negligence

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6
Q

Attaining professional competence

A

People studying to become a member of the AAT will probably be working in an accounting related job. By the time all the training, examinations, and assessments have been successfully completed to allow the person to be a member of the accountanting profession, this should mean they have gained necessary professional competence

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7
Q

Maintaining professional competence

A

There is a requirement to maintain a level of professional competence. Accountants must keep uptodate with all new developments. Accounting standards are constantly changing. As well as amendments to auditing standards and other legalisation such as taxation laws

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8
Q

International financial reporting standards (IFRS) are issued by the international accounting standards board (IASB) and international standards on auditing (IAS) are issued by the international aiding and assurance standards board (IAASB)

A

Changed in financial reporting and auditing standards

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9
Q

Professional bodied in the UK base their Ethical codes on the IFAC codes of ethics. This will be updated from time to time by the IFAC

A

Changes in ethical codes

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10
Q

Changes in tax and company legislation

A

Companies legislation is through the company’s act 2006

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11
Q

Changes in relevant law (bribery, fraud, money laundering)

A

Changes to the criminal legislation are contained within the statute law

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12
Q

The three main ways an accountant can keep update with changes

A

Reading professional journals, enrolling on updating courses, complying with continuing professional development (CPD) requirements for professional accountants

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13
Q

Professional accounting bodies recommends that its members should follow a programme of relevant CPD each…..

A

Year.

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14
Q

ICAEW ?

A

Institute of charted accountants in England and wales

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15
Q

AAT

A

Association of accountanting technicians

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16
Q

ICAEW requires its members to maintain their skills throughout their career. They must confirm they are doing this by _____ every year

A

Making a CPD declaration every year

It believes its members should complete as much CPD activity as they feel is required

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17
Q

Reflect (ICAEW)

A

Consider your development needs and how you can meet them and create a plan on action

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18
Q

Act (ICAEW)

A

Carry out your chosen CPD activity

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19
Q

Impact (ICAEW)

A

Evaluate the effectiveness of what you have done. Are you satisfied that your actions have enabled you to meet your objectives or do you need more work

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20
Q

Declare (ICAEW)

A

Each year you must declare your compliance by making a CPD declarion between 1st Nov and 31 Jan

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21
Q

The AAT CPD policy requires its members to undertake sufficient CPD to ensure competence. Part of this is to go through the CPD cycle at last once in a 12 month period or twice for members in practice

A

.

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22
Q

The AAT CPD cycle contains

A

Asses, plan, action, evaluate

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23
Q

CPD planner template

A

On the AAT website used to plan out the CPD that they are going to take

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24
Q

Possible CPD activity’s

A

Trading courses, obtaining on the job training, self study, research

Useful to write down anything new learns, this makes it easier to fill in the CPD reccord that will be sent to AAT you Can also include informal learning (no limit)

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25
Q

AAT members must keep CPD records which can be requested by AAT at anytime

Registered Members in practice will be asked to submit their CPD records when they renew their registration on the members in practice scheme

A

.

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26
Q

License members in practice and members doing voluntary work will be asked to submit their CPD records if there are selected at one of the?

An AAT member who is subject to a disciplinary investigation will also be asked to submit their CPD records to AAT

A

AATS CPD monitoring sessions which take place e Rey February and September.

27
Q

A professional accountant who works outside the limits of their professional experience will adhere which principle

A

Fundamental ethical principle of professional competence and due care

If an accountant takes on-a role knowing they’re incapable this would be breaching integrity and professional behaviour.

28
Q

What threats the ability of an accountant to carry out an appropriate level of competence and due care.

A

If they have insufficient time or properly performing or completing relevant duties,

if an accountant has inadequate information,

if the accountant has insufficient training,experience

Inadequate resources

29
Q

Professional liability

A

Having legal responsibility for something with the possibility of having to pay damages

30
Q

Liability can arise from a number of issues, including.

Criminal acts, breach of contract in the supply of services, breach of trusts, professional negligence, and fraud

A

.

31
Q

A client suffers a financial low that can be proved to be the accountants fault.

A

Professional negligence.

If the accountant entered into a contract with the client, this could be a breach of contract and uncertain cases they may even be accusations of fraud.

32
Q

Minimising the risk of professional negligence

A
  • An accountant she ensure before taking in an assignment the exact duties to be included (and excluded) in the assignment are written down and agreed by both the accountant and client.
  • Usually done in the letter of engagement
  • If further duties are added, these also need to be written down
  • when advise if given without information being provided, the accountant must make sure the client is aware of any limitations to this advise and write it down.
  • if audited accounts or financial statements are prepared, they should be marked for private use of the client.
  • if an assignment is complex, an accountant should take specialist advise and suggest the client does too
33
Q

Critical areas accountants must contain their professional competence are:

  • changes in f* R* and A***** standards
  • changes in E** c**
  • changes in t** and c***** legislation
  • changes in relevant C** l including bribery, f* and money L****
  • changes in regulation of accounting, reporting T** C** , A and the accounting and finance profession
A
  • changes in financial reporting and auditing standards
  • changes in ethical codes
  • changes in tax and companys legislation
  • changes in relevant criminal law including bribery, fraud and money laundering
  • changes in regulation of accounting, reporting Tax Compliance , Auit and the accounting and finance profession
34
Q

Financial reporting meaning

A

Financial statements are formal records of the financial activity’s and position of a business. Relevant information is presents in a structured manner.

Change in the lay out etc.

35
Q

Change in Auditing standards

A

A set of systematic guidelines used by auditors when conducting audits on companies finances assuring accuracy

36
Q

Company’s legislation

A

Law of Company’s

37
Q

Changes in criminal Law

A

Bribery, fraud, money laundering

38
Q

Change in Tax compliance

A

Making tax payments and producing and submitting information to the tax authorities on time and in the required formats

39
Q

The duty of confidentiality on the part of a professional accountant is only applicable for the duration of the assignment? True/false

A

False, the accountants duty of confidentiality to a client extends to the period after the relationship has ended

40
Q

An accountant has a professional duty to disclose information to protect their _____ interests in ______

A

Professional interests in legal proceedings

41
Q

What is the name of the process by which the person in an organisation who controls date informs the information commissioners office (ICO) about the way in which the organisation handles data

A

Notification

42
Q

Duty of confidentiality

A

The accountants obligation to respect confidential information about the client or employers affairs

43
Q

On going duty of confidentiality

A

Fact that the accountants duty of confidentiality continues even after the end of the relationship between the accountant and the employer or client

44
Q

Authorised disclosure of confidential information

A

Disclosure of confidentiality information by an accountant following authorisation by the client or employer

45
Q

Disclosure required by law

A

The legal requirement for an accountant to disclose financial information about a client or employer

46
Q

Money laundering

A

To Kobe illegally acquired cash through financial systems so that it appears to be legally acquired

47
Q

NCA

A

National crime agency

48
Q

Data protection act

A

Legislation to ensure that data held about individuals is handled properly

49
Q

ICO

A

Information commissioners office

50
Q

Accountants must make sure that any staff they supervise or manage also respect the principle of confidentiality

A

.

51
Q

When is it acceptable to disclose confidential information?

A

When authorised by the client or employer, when disclose is required by law, professional duty to do so

52
Q

Authorised disclosure

A

The client or employer could ask the accountant to disclose confidential information.

The main point being the accountant must get specific authority from the client before doing so

Ideally in writing

53
Q

When giving authorised disclosure

A

It’s important to to include a disclaimer making it clear that this is for the use of the specific company that requested the information and is given to purely help them make a decision whether to supply goods on credit to your client

Include information is given with out any financial responsibility on the part of yourself or the firm you work for

54
Q

The legal requirement to disclose confidential information is divided into two main categories:

A

Where the information is required as evidence

Where the law requires that information must be revealed to the relent authorities in situations where the law has been broken

55
Q

Evidence in court, the account May receive a witness summons from the court and be required to

A

Provide documents which will be used in court as evidence

And / Or to appear in court in person to give evidence

Or the account May be subject of a court order. Requiring them to disclose confidential information about yeh client

Break the confidentiality principle even if the client or employer refused permission

56
Q

Breaking confidential principle due to the law, what if the client refuses that the accountant uses their confidential information

A

They must wait for a witness summons. When this occurs she is legally required to comply with the summons and provide relevant documentation and maybe appear in court too

57
Q

Witness summons meaning

A

legal document ordering someone to appear in a court of law to give information about a particular person or event: apply for/issue/serve a witness summons Witness summonses can be served by post.

58
Q

Infringement of the law (breaking the law)

A

.

59
Q

Wha is the current legislation relating to money laundering

A

Proceeds if crime act 2002 and the terrorism act 2000 and the money laundering regulations 2007.

This requires that accounts must report immediately any suspicion that they have that money has been gained From illegal activity’s to the nations crime agency NCA

60
Q

A professional duty to disclose include:

A

To comply with the quality review of an IFAC (international federation of accounts) member body it or other relevant professional body

To respond to an inquiry by the professional accounting body or by the regulatory body of an ethical, investigatory or disciplinary nature

To protect the professional interests of the accountant in legal proceedings

Comply with technical standards and ethical requirements

61
Q

Accountants are advised to seek professional or legal advise before disclosing confidential information regarding the professional duty to disclose

A

.

62
Q

Data protection act 1998

It states that anyone who processes personal information must comply with these 8 principles which make sure the personal information is handled properly

A

Fairly and lawfully processed

Processed for limited purposes

Adequate, relent and not excessive

Accurate and up to date

Not kept for longer than necessary

Processed in line with the individual rights

Secure

Not transferred to other countries without adequate protection

63
Q

Data protection act 1998 includes the right to find out way personal information is held on computer and paper records about them

A

If an individual or organisation feel they are being denied access to personal information or they don’t believe their data is being handled fairly - they should contact ICO (information commissioners office)

64
Q

There is a statutory requirement for every organisation that processes information to register with the ICO. They must register annually and pay and annual fee to the ICO. Notification is he process by which the person controlling the data gives the ICO details about the way in which the company processes date.

A

Failure to notify the ICO could result in a fine if convicted

Ethics (12 decks)

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