Topic 19 - Professional ethics

Question 1

What are professional ethics?

Answer 1

The personal and corporate rules that govern behaviour within a particular organisation or profession. They are professionally accepted standards of personal and business behaviour. They use these rules as a guide to perform their jobs based on sound and consistent ethical principles.

Question 2

What are the 5 fundamental principles of ethics?

Answer 2

• Integrity
• Objectivity
• Professional competence and due care
• Confidentiality
• Professional behaviour

Question 3

What 5 roles are covered by most accounting roles?

Answer 3

1. Accounts payable
2. Accounts receivable
3. Payroll
4. Reporting and financial statements
5. Checking the accounts

Question 4

Why must accountants operate in the interest of its stakeholders?

Answer 4

Stakeholders will want to see sound financial data which is not misleading.

Question 5

What does acting in the public interest mean?

Answer 5

• Must work towards the highest levels of ethical and professional standards
• Must produce high quality financial statements that are audited to ensure accuracy
• Must comply with the international code of conduct
• Must guarantee that there are rigorous checking systems

Question 6

Who is an auditor?

Answer 6

An independent accountant that checks and approves your accounts. They act on behalf of the owners to check that the accounts are accurate and show a true and fair view of how the business is doing.

Question 7

Who are the public referred to when we act in public interest?

Answer 7

• Investors, owners and business owners of public sector and private sector organisations
• Customers and competitors
• Taxpayers

Question 8

What are the interests referred to when we act in public interest?

Answer 8

All things valued by society. This includes economic wellbeing and certainty of business environment. It also includes financial information that leads to the protection of the environment and reduces the depletion of natural resources.

Question 9

Why must accountants behave in the public interest?

Answer 9

So that the public can have confidence that profits stated are true and fair. They must not mislead the public with overstated figures when producing accounts for a firm.