CAT / FIA FBT Syllabus F. Professional Ethics In Accounting And Business - IFAC (IESBA) Code of Ethics - Notes ^{2 / 4}

Most companies have approached the business ethics issue by formulating a set of internal policies and instructing employees to follow them.

Often ethics officers also called compliance officers are appointed to monitor the application of the policies and to be able to discuss ethical dilemmas with employees who approach them.

Code of Ethics for Accountants

“The International Federation of Accountants (IFAC) is an international body representing all the major accountancy bodies across the world. 

Its mission is to develop the high standards of professional accountants and enhance the quality of services they provide”

IFAC & ACCA (Association of Chartered Certified Accountants)

To ensure the development of high standards within the profession, the IFAC established a code of ethics. 

These indicate a minimum level of conduct. 

As a member the ACCA released there own code of ethics, designed to align to those of the IFAC (this means that the standards of ACCA are the same as those of IFAC)

The purpose of IFAC

is to promote ethical standards

• IFAC has no legal powers against businesses, nor does it set financial reporting standards. 

  It is an accounting association member body which promotes educational and ethical standards of behaviour amongst its member bodies, through a code of ethics and behaviour, but does not prescribe detailed rules on this.

ACCA Fundamental Principles

1. Integrity

   “Members should be straightforward and honest in all professional and business relationships.” 

   The ACCA Rulebook (and the IFAC Code of Ethics) goes on to state that integrity implies not merely honesty, but fair dealing and truthfulness.

2. Objectivity

   “Members should not allow bias, conflicts of interest or undue influence of others to override professional or business judgements.”

3. Professional competence and due care

   “Members have a continuing duty to maintain professional knowledge and skill at a level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques. 

   Members should act diligently and in accordance with applicable technical and professional standards when providing professional services.”

4. Confidentiality

   “Members should respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such information to third parties without proper and specific authority or unless there is a legal or professional right or duty to disclose. 

   Confidential information acquired as a result of professional and business relationships should not be used for the personal advantage of members or third parties.”

5. Professional behaviour

   “Members should comply with relevant laws and regulations and should avoid any action that discredits the profession.” 

   The ACCA Rulebook goes further, and states that members should behave with courtesy and consideration towards all with whom they come into contact in a professional capacity.

The ACCA's Code of Ethics and Conduct is contained in the annual Rulebook issued by the Association.  All registered students, affiliates and members of the ACCA are required to comply.

All ACCA members must comply with the Fundamentals Principles, whether or not they are in practice.  Members must identify threats to compliance with the Principles and apply safeguards to eliminate the threat or to reduce it to an acceptable level such that compliance with the Fundamental Principles is not compromised

An ACCA member may be called to appear before the Disciplinary Committee for breach of any of the ethical principles and may be admonished (warned), fined, suspended or excluded from membership.