Chapter 1: Reporting framework and ethics

Ethical and professional Issues Fundamental Principles

Integrity
• To be straightforward and honest in all professional and business relationships.
• Integrity also means that members must not knowingly be associated with misleading
information.

• Not to compromise professional or business judgements because of bias, conflict of

Objectivity interest or undue influence of others.

• If undertaking an assurance engagement, members must also be and appear to be
independent.

Professional • To attain and maintain professional knowledge and skill at the level required to
ensure that a client or employing organisation receives competent professional
Competence and Due service, based on current technical and professional standards and relevant legislation;
and act diligently and in accordance with applicable technical and professional
Care standards.
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• To respect the confidentiality of information acquired as a result of professional and business

Confidentiality
relationships.
• Confidential information must not be disclosed outside the organisation without authority,
unless there is a duty or right to disclose, or disclosure is in the public interest and permitted by
law.

Professional • To comply with relevant laws and regulations and avoid any conduct that the professional

Behavior
accountant knows or should know might discredit the profession.
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Various circumstances or situations can lead to threats to complying
with the fundamental principles. The key ones to learn (from the
ICAEW Code of Ethics) are:
• Self-interest threat – a financial or other interest of a professional
accountant (or of an immediate or close family member) will
inappropriately influence the professional accountant’s judgement
or behaviour.
Principles threatened include: Objectivity, Professional behaviour,
Professional competence and due care.
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• Self-review threat – a professional accountant will not appropriately
evaluate the results of a previous judgement made/service
completed by the professional accountant.
Principles threatened include: Objectivity and confidentiality.
• Advocacy threat – a professional accountant will promote a client’s
or employer’s position to the point that the professional
accountant’s objectivity is compromised.
Principle threatened includes: Objectivity.
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• Familiarity threat – due to a long or close relationship with a client
or employer, a professional accountant will be too sympathetic to
their interests or too accepting of their work.
Principles threatened include: Objectivity, Integrity, Professional
competence and due care.
• Intimidation threat – a professional accountant will be deterred
from acting objectively by threats, either actual or perceived
including attempts to exercise undue influence over the accountant.
Principles threatened include: Objectivity, Professional behaviour,
Integrity.