ACADEMY OF FINANCE

ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

CHAPTER 9 : The professional accountant

Thu TRAN, PhD.
Nhung DAO, PhD
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

Contents
1. Introduction to the accountancy profession
2. The importance of the accountancy profession
3. Professional responsibility
4. Technical competence
5. The work of accountancy profession
6. Accounting principles
7. Accounting standards
8. Roles of the professional accountant
9. Limits of the professional accountant’s responsibilities
10. Technology developments and the accountancy profession
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

Learning Outcomes
üIdentify the importance to the public interest of high quality, accurate financial
reporting and assurance
üSpecify the rationale for key parts of the profession’s work and the links
between the public interest, technical competence and professional
responsibility, including accounting principles, accounting standards and sound
business management
üSpecify the key features of the structure of accountancy profession, the
regulatory framework within which professional accountants work and the ways
in which the accountancy profession interacts with other professions
üIdentify the effect of technology developments, including those relating to
automation and intelligent systems, on the accountancy profession
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

Syllabus link
üMany areas of the Certificate, Professional and Advanced syllabuses
Assessment context
üMCQ;
üStraight tests of knowledge;
üApplications of knowledge to a scenario
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

profession value
Definition of a profession? profession responsibility
techinical competent
v A profession: an occupational area or vocation that involves prolonged
training leading to a formal qualification. It can be defined by a group of
attributes which distinguish it from other, nonprofessional groups.
vSome attributes of professions:
vFormal regulatory process
vGreat degree of autonomy
vProfessional values
vSelf-regulation
vCo-regulation
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

Definition of a profession?
vSome attributes of professions:
vFormal regulatory process: set up quy định để chi phối những người vào nghề
v Professions are permitted to set their own licensing rules and regulations which form a
barrier to new entrants into the profession and its markets; also protect the profession from
competition
v Able to restrict entry to membership, through qualification process
v Have a supporting body of theory and knowledge (Accounting Standard)
v May gain monopoly control over specialist areas of work, which may be protected by the law,
so that non-member are not permitted to do this work.
vGreat degree of autonomy: public trust
vProfessional values: codes of ethics and conduct. To work in the public interest
vSelf-regulation đưa ra quy định riêng
vCo-regulation
public authority => legal regulation => kh cấm
professional regulation => cấm
có mâu thuẫn thì tuân theo phạt nặng hơn
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

1. The accountancy profession

v Professional: A person who:
vAccepts a responsibility to operate in the public interest
vProfesses to have skill resulting from a coherent course of study and training based on
professional values
vContinues to develop and enhance those skills by experience and continuing professional
education.
vAccountancy:
vThe profession of accounting which comprises measurement, preparation, validation,
disclosure, auditing of and provision of assurance and advisory services on financial
information.
vAccountancy profession:
vThe profession concerned with the measurement, disclosure or provision of assurance about
financial information that helps managers, investors, tax authorities and other decision
makers make resource allocation decisions.
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

1. The accountancy profession

v At the heart of the accounting profession are:
vFinancial reporting: the provision of financial information about an entity to external
main part
users that is useful to them in making decisions and for assessing the stewardship of the
entity’s management.
vAssurance: The expression of an opinion or conclusion by a professional accountant in
public practice which is designed to enhance the confidence of intended users.
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

2. The importance of the accountancy profession

2 objectives
v 2.1. The effective working of capital markets - effective capital market
- protect public interest
vThe accountancy profession is actively involved in ensuring that
organizations (both private and public sector) have access to sufficient
finance.
vOptimum decision can be reached with adequate information and no
asymmetric information. thông tin bất cân xứng => internal có nhiều thông tin hơn external
vHigh quality, accurate finance reporting and assurance that the
professional accountant supports the effective working of capital markets
for the benefit of businesses.
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

2. The importance of the accountancy profession

v 2.2. The public interest
vPublic interest: The legitimate interests of clients, government, financial
institutions, employers, employees, investors, the business and financial
community and others who reply upon the objectivity and integrity of the
accounting profession.
vProfessional accountants must keep up to date with the expectations of society
so they can fulfill their role and build confidence in the profession.
vConfidence links two followings:
vProfessional accountants in business: the accountants as members of boards of
directors or in exercise of the authority devolved by BOD, are responsible for
preparing a company’s financial statement
vProfessional accountants in public practice: auditors or as professional on other
assurance engagement, are responsible for reporting on these statements.
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

2. The importance of the accountancy profession

v 2.2. The public interest
vA key consequence of working in the public interest is that ICAEW members must report
acts of misconduct. If they were go unreported could adversely affect the good name of
the profession.
vThe ICAEW issues guidance on the responsibilities relating to defaults and unlawful acts
encountered in the course of professional work and to their position where disclosure is
made.
vThe ICAEW Code of Ethics is issued to all members and states five fundamental
professional principles with which the professional accountant in public practice must
comply in carrying out their work.
vA professional accountant should show:
v Professional responsibility (integrity)
v Technical competence (expertise)
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

3. Professional responsibility
v 3.1. What are ethics and ethical behavior?
vEthics: A system of behavior which is deemed acceptable in the society or
context under consideration. Ethics tell us “how to behave”.
vEthical behavior: Acting in a manner which is perceived to be acceptable
in the circumstances – or “behaving well”.
vPublic trust and professional ethics:
vPublic trust requires professional accountants to behave ethically.
vBeing a member of a skilled profession entails behaving in line with the
particular standards that are expected of, and required by, the whole
profession.
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

3. Professional responsibility
v 3.2. Public trust and professional ethics
vProfessional ethics: identifying ethical dilemmas, understanding the implications and
behaving appropriately in line with a code of behavior that is accepted among fellow
professional as being correct.
vUpholding professional ethics is a key part of being a professional accountant.
v An accountant’s ethical behavior serves to protect the public interest
v Ethical issues may be a matter of law and regulation and accountants are expected to apply
them
v By upholding professional standards, the profession’s reputation and standing are protected,
and public trust in the profession is retained
v Consequences of unethical behavior by an individual accountant include disciplinary action
against the accountant by their employer, ICAEW or the FRC and adverse effects on jobs,
financial viability and business efficacy in their organization.
v Accountants employed in the public sector have a duty to protect tax-payers’ money.
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

3. Professional responsibility
v 3.3. The ICAEW Code of Ethics: a conceptual framework
vTwo theoretical approaches that can be followed by: quy định cụ thể
v Compliance-based approach: also known as rule-based: the governing body will attempt to
anticipate every possible ethical situation and lay down specific rules for members to follow.
As with law, members are expected to follow the rules and will be accountable if they breach
them – effectively members are legally bound. It is often called “a tick box” approach to
professional ethics and is well established in the US.
v Ethics-based approach (also known as framework-based): principles are set out which
describe the fundamental values and qualities that members should embody. There is no
attempt to prescribe detailed rules but general guidelines are developed to give advice on
how certain situations should be handled. This approach means members follow examples of
good or best practice. quy định chung
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

3. Professional responsibility
v 3.3. The ICAEW Code of Ethics: a conceptual framework
vICEAW follows the ethics-based approach.
vHaving developed a code of ethics which is a conceptual framework.
vProfessional accountants must comply with its five fundamental principles.
vFundamentals means the principles form the bedrock of professional judgements,
decisions, reasoning and practice.
vICAEW members must not only know them but also apply them in their everyday work.
vThe Code identifies potential threats to the principles and some corresponding
safeguards.
v5 Fundamental principles:
v Integrity, objectivity, professional competence and due care, confidentiality and professional
behavior.
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

4. Technical competence
v 4.1. ICAEW’s entry and education requirements
vBy undertaking prescribed training and education, the student accountant
is:
vAcquiring the knowledge and understanding that underlie what accounts do
vDeveloping the skills and abilities necessary to perform the tasks and roles undertaken
by the professional accountant
vBuilding personal commitment and professional ethics
vA balance is needed between knowing the underlying principles and rules that apply to
all or most transaction and knowing detailed requirements related specialized
transactions.
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

4. Technical competence
v 4.1. ICAEW’s entry and education requirements
vStudents should develop the ability to:
vApply basic accounting skill
vUnderstand the accounting principles underlying financial reporting and assurance
vUnderstand what the numbers that come out of the reporting process are telling them
vApply professional skepticism appropriate in their work hoài nghi nghề nghiệp
vApply critical thinking in their work tư duy phản biện
vProfessional skepticism: Assessing information, estimates and explanations critically,
with a questioning mind, and being alert to possible misstatements due to error or fraud.
vCritical thinking: The ability to analyze and evaluate issues objectively and rationally,
keeping a clear head when forming judgements about matters being considered.
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

4. Technical competence
v 4.3. Reserved areas of practice
vThere are four activities, known as reserved areas, which legislation
requires to be carried out by members of certain bodies which are
recognized professional regulators:
vStatutory audit skill, experience
vInvestment business CFA
vInsolvency phá sản, giải thể
vProbate thừa kế
vThe reserved areas have the required level of technical competence and are subject to
an appropriate disciplinary regime.
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

5. The work of the accountancy profession

vThree basic aspects of the professional accountant’s work:
recording transaction, effective internal
vMaintaining control and safeguarding assets; control, risk management system
vFinancial management;
vFinancial reporting
v5.1. Maintaining control and safeguarding assets
vThe professional accountant will therefore seek to ensure that:
v The recording of transactions is complete, timely and accurate
v The business’s internal controls are sufficient
v The business’s overview of internal controls and risk management has a proper process; and
have the information and resources it needs to fulfill its objectives
v The business has non-executive directors who are adequately qualified and resourced so that
they can fulfill their role.
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

5. The work of the accountancy profession

vThree basic aspects of the professional accountant’s work:
vMaintaining control and safeguarding assets;
vFinancial management;
vFinancial reporting
v5.2.Financial management
vThe management of all the processes associated with the raising and use of financial
resource in a business.
vFinancial management therefore incorporates aspects of many issues that we have
seen in earlier chapters: transaction recording; raising new finance; using existing funds
in ways which support achievement of business’s objectives; planning and control
system; treasury management.
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

5. The work of the accountancy profession

v5.3.Financial reporting
vThe transactions and activities of the business, as represented in its accounting records,
must be reported to external stakeholders.
vTo ensure that there is high quality financial reporting, the professional accountants
have two sets of principles which underlie everything he or she does:
v Professional ethics
v Accounting principles
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

6. Roles of the professional accountant

vA professional accountant who technically competent and professionally
responsible can perform a wide variety of roles.
vTraditionally, professional accountants have tended to:
vWork in public practice with an accountancy firm, or
vBe employed by a private or public sector or organization to help in its management.
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

6. Roles of the professional accountant

v6.1. The professional accountant in public practice
vA professional accountant in public practice is in a firm providing professional services that
require accountancy or related skills, including:
v Accounting
v Auditing and assurance (reserved area)
v Taxation
v Management consulting
v Investment business (reserved area)
v Insolvency (reserved area)
v Financial management
v Corporate finance
v Information and communication technology
v Forensic accounting
v Probate (reserved area)
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

6. Roles of the professional accountant

v6.1. The professional accountant in public practice
vFirms vary in size from the sole practitioner to one of the ‘Big Four’ multinational
accountancy firms:
v PwC
v Deloitte
v EY
v KPMG
vThese firms are associations of the partnerships in each country rather than having the
classical structure of parent company and subsidiaries.
vEach has an international “umbrella” organization for co-ordination.
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

6. Roles of the professional accountant

v6.2. The professional accountant in business
vA professional accountant in business is one who employed or engaged, in an
executive or non-executive capacity, in such areas as:
v Commerce
v Industry
v Service
v The public sector
v Education
v The not-for-profit sector
v Regulatory or professional bodies
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

7. Limits of the professional accountant’s responsibilities

v7.1. How far do the professional accountant’s responsibilities go?
vLegal matters are normally dealt with by qualified solicitors or barristers in an advisory
or representative capacity. Many companies employ in-house legal teams, staffed with
professional lawyers.
vThe professional accountant should be careful not to stray too far into legal matters,
beyond those in which they are technically competent to some degree (such as company,
business and employment law).
vCertain administrative matters often fall directly into the role of the professional
accountant, such as the tasks performed by a company secretary:
v Share registration phát hành cổ phiếu
v Calling meetings
v Drafting resolutions for meetings bcao đại hội đồng cổ đông
v Complying with the requirements for updating the company’s details with the Registrar of
Companies
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE

7. Limits of the professional accountant’s responsibilities

v7.1. How far do the professional accountant’s responsibilities go?
vTaking out and claiming against insurance policies often falls into the role of the
professional accountant in business, but beyond a certain level of complexity insurance
specialists and actuaries should be used.
vThe acquisition, refurbishment or disposal of property often involves the professional
accountant in valuation, negotiation, tax and legal aspects.
vHR professional
vProcurement professionals
vIT
 ACADEMY OF FINANCE
ICAEW – CFAB
FINANCIAL ANALYSIS DEPARTMENT
BUSINESS, TECHNOLOGY, AND FINANCE
can be replaced or not
=> transaction recording
not => estimated, professional skeptism, consultant

8. Technology developments and the accountancy profession

vAutomation, machine learning and intelligent system: ledgers, reconciliations
vMore powerful systems: This frees up the accountant to perform value-adding roles
vSystem innovations and applications: advices
vDigital contracts and transactions
vNew types of data, information and risks
vNew types of goods and services
vTransparency in recording and sharing data
vAudit analytics and intelligent systems
vSmart contracts triple entry accounting => ngoài ghi nhận debit và credit thì có public ledger
vData analytics block chain => bảo mật

vSoftware controls and data sets

vDistributed Technology and Advanced Accounting System
vRegulation