Professional code of ethics

Profession
Corporate ethics
Professional code of ethics

Profession
Body of skill and knowledge
Code of values and conduct
Duty to the society
Difference between profession and professionalism
Profession is body of theory and knowledge and professionalism is taking action
Accounting profession (professionalism)
a. Reactive approach
a. Taking responsibility for any negative consequences of accounting practice and, where
appropriate, amending those practices to remove those consequences.
b. Proactive Approach
a. Seeking out and positively contributing to the public interest.
b. Public Interest (for accountants)
i. Collective wellbeing
ii. Welfare of society
iii. Working of stock exchange as of public interest
iv. Security of jobs
Public Interest: support the goods of society as whole
Duty to the society (for accountants)
1. Public interest (society betterment, common and general welfare as whole )
a. Customers, community, suppliers, government, employees and employers
b. Public interest and human rights
c. Cannot violate the human rights
d. Public interest and companies (corporation may harm the society environment)
e. Public laws
f. Accountant cannot act against the public interest
g. Accountants should disclose any matter to public interest which could harm the society.
h. Reduce the potential for accounting misstatement and corporate fraud
i. Provide managers with information to support decisions
j. Provide information to the markets and shareholders
k. Provide assurance to the market regarding company operations
l. Support capitalism and the economic societal gains of commerce
 2. Accountant influence
a. Organization
i. Audit, financial and management accounting, taxation, consultancy
ii. Audit limit the role of accountant
iii. Selling of additional services limit the role of accountants
iv. To build relation with client limit the role
v. Competition limit the role of accountant for organization ( for competition has
to be unethical)

b. Society
i. CSR reporting
ii. Sustainability reporting
iii. Full and Environmental; costing
iv. Distribution of power and wealth

Code of ethics
Corporate code of ethics
Professional Code of ethics
3. Corporate Code of Ethics
a. Purpose
i. Establish the organizational values
ii. Promote stakeholders responsibilities
iii. Control of individual behavior
iv. Promotion of business objectives
b. Key areas
i. Make it (corporate code of ethics )part of mission and vision of organization
ii. Focus on individual employee behavior
iii. Customers should be treated courteously and politely, quality and fair pricing
iv. Following the all legal and regulatory requirement and standards
v. Maintain good relations with suppliers and subcontractors
vi. Promote competitive behavior
vii. Environment protection and sustainable development
viii. Responsibility towards community development

4. Professional code of ethics

a. Content of professional codes
i. Address to who is affected
ii. Fundamental principles
iii. Conceptual Framework (applicable laws rules and regulations and ethical
principles
iv. Application
 b. Principles
i. Integrity
ii. Objectivity transparency and fairness and independence
iii. Professional competence
iv. Confidentiality
1. Cannot disclose information
2. Until
3. Its is required by law, public interest or asked by standards
v. Professional behavior
1. Understand and apply laws rules regulation
2. Reputation
5. Conflicts of interest and ethical threats
a. Is situation where personal interest and organizational interest are conflicting
b. There is ethical threats
c. Ethical threats
i. Self interest threats
ii. Self review threats
iii. Advocacy threats
iv. Familiarity threats
v. Intimidation threats
d. Safeguards
i. Profession
1. CPD requirement
2. Corporate Governance
3. Disciplinary proceedings

ii. Work Environment

1. Internal Control System
2. Review procedures
3. Organizational code of ethics
iii. Individual
1. Training and development
2. Mentoring
3. Complying with ethical standards
6. Ethical Dilemmas
Situations in which there is a choice to be made between two options, neither of which resolves
the situation in an ethically acceptable
a. Rule based approach
i. Rules for members
ii. Enquire members
 b. Principle based approach
i. Principles for members
ii. Require Members
7. Ethical conflict resolution
a. Gather facts
b. Identify issue
c. Relevant principles
d. Investigate course of action
e. Involve professional
f. Involve institute
8. Corruption and bribery
a. Bribery – Giving offering receiving and soliciting anything to in charge of public office to
influence decision
i. Facilitation payment
ii. Buying votes
iii. Payment to political parties
iv. Misappropriation of public fund
b. Corruption – deviation from honest behavior
i. Legal risk
ii. Reputational risk
iii. Financial cost
iv. Black mail
v. Staff
vi. Development
vii. Conflicts of interest

c. How to reduce corruption

i. Proportionate procedure (measures according to the risk and complexity
ii. Top level commitment
iii. Due diligence
iv. Communication
v. Monitoring and review
d. Barriers to anti corruption and Bribery
i. Competitive advantages
ii. Managerial apathy
iii. Off the shelf solutions
iv. Corporate structures
v. Pressure to hit targets
vi. Different cultures
9. Ethical decision making
a. IAESB framework (international assurance engagement standard board)international
standard accountant education board)
 i. Ethical knowledge (Scenario)standards of ethics or code of ethics )
ii. Ethical Sensitivity (information that conflicting with code of ethics)
iii. Ethical Judgment (which is better ethical solution)
iv. Ethical Behavior (action or application)
b. Application of framework
i. American Association model
1. Facts of cases
2. Ethical issues
3. Norms, principles and values
4. Alternative course of action
5. Best course of action
6. Consequences of course of action
7. decision
ii. Trucker 5 question model
1. Profitable
2. Legal
3. Fair
4. Right
5. Sustainable or environmentally sound

10. Ethical Behavior

a. Issue related factors
i. Moral intensity- one's perception, evaluation, and response to a moral issue
stem from characteristics of the issue itself
ii. Moral framing - Framing is how a person perceives and
communicates about reality. Moral framing is how a person’s
morals affect their way of thinking.
b. Context related factors
i. Expectation and demand that will be placed on people working in organization
ii. Features
1. System of rewards
2. Authority
3. Bureaucracy
4. Work roles
5. Organizational cultures
6. National cultures