CIMA Code of Ethics

FOR PROFESSIONAL ACCOUNTANTS

ACRONYN – FAIIR
FUNDAMENTAL PRINCIPLES
FAMILIARITY THREAT
ACRONYM - COPPI
 Become so sympathetic!
CONFIDENTIALITY  Professional judgement
 Not to disclose professional becomes compromised.
information unless permitted or legal ADVOCACY THREAT
or professional body
 Promoting a position or opinion
OBJECTIVITY
INTIMIDATION THREAT
 Not allowing bias
 Perceived pressure or influence over
PROFESSIONAL COMPETENCE AND DUE the accountant
CARE
SELF- INTEREST THREAT
 Commitment to your level of
professional knowledge or  Commonly called “Conflict of Interest”
skills.  Inappropriately influence
judgement/behavior.
PROFESSIONAL BEHAVIOUR
SELF- REVIEW THREAT
 Comply with relevant laws
and regulations.  Evaluate the result of a
previous judgment/services.
INTEGRITY
THREATS NOT @ ACCEPTABLE LEVEL
 Being straightforward, honest, and
 Conceptual Framework requires
truthful in all professional and
to address threats.
business relationships.
 Not associated with any SAFEGUARDS – one way to reduce threats.
information that you believe
contains a materially false or  Reduce threat to an
misleading. acceptable level.

CONCEPTUAL FRAMEWORK
 Helps to IDENTIFY, EVALUATE, AND
ADDRESS threats to compliance with
fundamental principles.
 Assist accountants in complying
with fundamental principles and
meeting their responsibility to act in
the public interest.
APPLICATION:
 Exercise Professional Judgement
 Remaining alert for new information
 Informed third party test.
THREATS TO COMPLIANCE
W/ FUNDAMENTAL
PRINCIPLES
S100 – Complying with the Code
 Accountancy Profession has
responsibility to act in the
Public Interest
Applying a specific requirement of the code might
disappropriate or not for public interest. *
ACCOUNTANT SHALL:
 Consult with a professional or regulatory body.
BREACHES OF THE CODE
ACCOUNTANT SHALL:
 Take whatever actions might be available (ASAP)
 Determine whether to report the breach to the
relevant parties.
- Affected
CIMA Code of Ethics
FOR PROFESSIONAL ACCOUNTANTS
- Professional / regulatory body  Omits or obscure information.
- Authority
If knowingly associated accountant shall take step to be
disassociated from that information. *
S110 – Fundamental Principles
S112 – Objectivity
C
 Accountant shall not undertake a
 Respect the confidentiality activity if it unduly influence the
of information. accountant’s professional
O judgement.

 Not compromise professional S113 – Professional

or business judgement because
of bias, conflict of interest or
Competence and Due Care
undue influence of others.  Requires the exercise of
P sound judgment.
 Requires a continuing awareness and
 Attain and maintain an understanding of relevant
professional knowledge and technical, professional, and business
skills. development.
 Act Diligently  Working in the profession under the
accountant’s authority have
P
appropriate training and supervision.
 Comply with laws
and regulations. S114 – Confidentiality
I  Serves the public interest because
it facilitates the free ffow of
 Straightforward and honest. information.

Accountant shall:
If complying with one fundamental principles conffict
with one or more*  Be alert to the possibility of
ACCOUNTANTS SHALL CONSULT: inadvertent disclosure.
 Others within the firm or employing
organization  Maintain confidentiality of
 Charge with governance information within the firm / employing
 Professional Body organization.
 Regulatory Body  Maintain confidentiality of
 Legal Council
information disclosed by a
*if necessary exercise professional judgement prospective client or employing
ACCOUNTANT SHALL DOCUMENT: organization.
 Issue
 Not disclose outside the firm
 Details of any discussion
 Decision made  Not use confidential information
 Rationale for personal advantage or for third
party.
S111 – Integrity  Not use or disclose even after of
the relationship with client has
 Implies fair dealing and truthfulness.
ended.
Shall not knowingly associated with reports:  Take reasonable steps to ensure
that personnel under the
 False or misleading
accountant’s control.
 Information provided recklessly.
CIMA Code of Ethics
FOR PROFESSIONAL ACCOUNTANTS
WHEN SUCH DISCLOUSE MIGHT BE APPROPRIATE:

 Required by law.
 Permitted by law and authorized by the client.
 Professional duty or right to disclose.
CIMA Code of Ethics
FOR PROFESSIONAL ACCOUNTANTS
- Quality review
- Investigation
- Legal proceeding
- Ethical requirements
FACTORS TO CONSIDER IN DECIDING WHETHER TO
DISCLOSE*
 The interest of any parties could
be harmed.
 Information is known
and substantiated.
S115 – Professional Behavior
 Accountant shall not knowingly
engage in any business that impairs the
integrity, objectivity, or good
reputation of the profession.
 Accountant shall be honest and
truthful and shall not make:
- Exaggerated claims
- Disparaging references or
unsubstantiated comparisons
to the work of others.
If accountant is in doubt *
 Accountant shall consult with
relevant professional body.
PROFESSIONAL JUDGEMENT
 Involves the application of relevant
training, professional knowledge,
skills, and experience commensurate
with the facts and circumstances,
including the nature and scope of the
particular professional activities, and
the interests and relationships
involved.
matters that accountant might consider in
exercising professional judgment:
 Relevant information might be missing.
 Inconsistency between known facts
and circumstances and the
accountant’s expectations
 Accountant’s expertise and
experience are sufficient.
 There is a need to consult.
 Information provides a
reasonable basis.
 Accountant’s own preconception
or bias might affect the
accountant’s exercise of
professional judgment.
 There might be other
reasonable conclusions.
REASONABLE AND THIRD-PARTY TEST
 A consideration of an accountant
about whether the same conclusions
would likely to be reached by another
party.
Identifying Threat
 Threat to compliance with
the fundamental principles.
Evaluate Threat
 Threat @ acceptable level
- A level at which an
accountant using the
reasonable and informed
third party test.
Factors*
 The consideration of qualitative
and quantitative factors in
evaluating threats.
CONSIDERATION OF NEW INFORMATION
Accountants shall:
 Re-evaluate and address
threat accordingly.
IF new information results a new threat
accountant shall:
 Evaluate threat
 Address threat
Addressing Threat
IF the threat is not @ acceptable level*
 Eliminate or reduce threat at acceptable level.
Or*
 Eliminating the circumstances
CIMA Code of Ethics
FOR PROFESSIONAL ACCOUNTANTS
 Applying safeguards
 Declining or ending the activity
CIMA Code of Ethics
FOR PROFESSIONAL ACCOUNTANTS

S200 – Applying the conceptual

SAFEGUARDS
 Are action, individually or in
combination that the professional
accountant takes that effectively
reduce threats.
OVERALL CONCLUSION REACHED
The accountant shall:
 Review any significant judgement made.
 Use reasonable and informed third
party test.
INTERNATIONAL INDEPENDENCE
STANDARD
 Requires accountant to be
independent when performing audits,
reviews, or other assurance
engagements.
framework (professional
accountants in business)
“Members” defined and referred to as:
solely or jointly responsible for the preparation
and reporting of financial information.
 Members in business (AICPA –
CGMA credentials)
 All professional accountant in
business (CIMA)
 Professional accountant in public
practice (CIMA)
* rely on work of members
 Investors
 Creditor
 Employing organization
 Government
 General public
Members might be:

Independence Objectivity
 Employee
Comprises: Integrity  Contractor
 Partner
Independence of Mind
 Director (ex or non ex)
 Owner-manager
 The state that permits the expression  Volunteer
of a conclusion without being  Engaged in commerce.
affected by influence and exercise  Education
objectivity and professional  NPO
skepticism.  Regulatory / professional
Independence in appearance bodies THREATS under this code *
 The avoidance of facts  Adverse interest – not act with objectivity
and circumstances.  Advocacy
PROFESSIONAL SKEPTICISM
 Familiarity
 Self-interest
 Self-review
 Inter-related to fundamental principles.
 Undue inffuence
Also exercise:
Evaluating Threats *SAME CONCEPT
 Integrity But*
 Objectivity - when a threat does not compromise
 Professional Competence a member’s compliance with rules
and fundamental principles, threat
is @ acceptable level and members
is not required to evaluate any
further.
CIMA Code of Ethics
FOR PROFESSIONAL ACCOUNTANTS
Addressing Threats *SAME CONCEPT
But if the threat cannot be eliminated and safeguards
are not available or capable to apply*
- Appropriate for a member to resign
from the employing organization.
COMMUNICATING WITH
THOSE CHARGED WITH
GOVERNANCE
 Involved in managing the
employing organization.
In determining with whom to communicate:
 The nature and importance of
the circumstances.
 The matter to be communicated.
S210 – Ethical Conffict
Arises when:
 Obstacles due to internal and
external pressures
 Conflicts in applying relevant
professional and legal
standards.
*Members should either do:
 consultation
 seek advice form professional or
legal counsel.
Documentation:
 The parties with whom the issue
was discussed.
 Details of discussions
 Decision made.
INTEGIRITY AND OBJECTIVITY RULE
(AICPA) AND PRINCIPLES (CIMA)
Member shall:
 Maintain objectivity and integrity.
 Be free of conflicts of interest.
 Not knowingly misrepresent facts.
In absence:
 Member should apply the
Conceptual framework for members
in Business.
Considered in violation if the member cannot
demonstrate that they identified, evaluated, and
addressed threats.
S220 – Conffict of Interest
(members in business)
 Create, adverse interest and
self- interest threats.
*Comply:
 Rules and fundamental principle
and apply conceptual framework.
*Faced with a conffict of interest:
 Use professional judgement.
Identification of a conflict of
interest *SAME CONCEPT
Evaluation of a conflict of
interest
 Consider qualitative and
quantitative factors.
If threat is not @ acceptable level *
 Apply safeguards.
Or
 Restructuring or
segregating responsibilities
and duties
 Obtaining appropriate oversight
 Consulting with third parties
Actions that eliminate threat*
 Withdrawing
 Declining or discontinue
 Terminate the relationship.
Disclosure is necessary!!!
If consent is not in writing, documentation is
encouraged:
CIMA Code of Ethics
FOR PROFESSIONAL ACCOUNTANTS
 Nature of the circumstances
 Safeguards applied
CIMA Code of Ethics
FOR PROFESSIONAL ACCOUNTANTS
 Consent obtained.

ADDRESSING A CONFLICT OF
INTEREST
Member shall seek guidance from:
 Within the employing organization
 Professional body
 Legal counsel
 Professional Accountant