Do you know about - Are Ethics leading For expert Accountants?
Social Work Licensing Board! Again, for I know. Ready to share new things that are useful. You and your friends.Ethics in professional accountancy are of utmost importance. Now as the firm and financial world is adopting international accounting and auditing standards, it is becoming all the more indispensable to bind to positive Code of Ethics prescribed by international and national accountancy bodies. Before arguing in favour of the topic, let's have a look at some basic concepts:
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Profession
A profession is an occupation that requires unabridged training and the study and mastery of specialized knowledge, and ordinarily has a professional association, ethical code and process of certification or licensing; for example engineering, medicine, collective work, teaching, law, finance, the military, nursing and Accountancy etc. Classically there were only three professions: military, treatment and law. Each of these professions holds to a exact code of ethics and members are approximately universally required to swear some form of oath to uphold those ethics, therefore 'professing' to a higher thorough of accountability. Each of these professions also provides and requires unabridged training in the meaning, value and point of its single oath in practice of that profession.
Accountant
Practitioner of Accountancy is known as Accountant. Distinguished Accountant, Accountant, professional Accountant or Accountancy Practitioner is a legally certified accountancy and financial expert. Accountants not only work in collective practice but many of them are working within inexpressive corporations, in financial commerce and in discrete government bodies. Accountancy (profession) or accounting (methodology) is the measurement, disclosure or provision of insurance about financial data that helps managers, investors, tax authorities, lenders and other stakeholders and decision makers to make resource budget and course manufacture decisions.
Like many other professions there are many professional bodies for accountants throughout the world. Some of them are legally recognized in their jurisdictions such as British Distinguished accountants along with Chartered Certified Accountant (Acca or Fcca), Chartered Accountant (Ca, Aca or Fca), Canadian Distinguished accountants such as Chartered Accountant and Certified normal Accountants (Ca or Cga) and American Distinguished Accountants such as Certified collective Accountants (Cpa) etc. Some other statutory and non-statutory accountancy qualifications are Certified management Accountant (Cma), connected Cost and management Accountant (Acma), Certified Financial analyst (Cfa) and Certified Fraud analyst (Cfe) etc.
In Pakistan, the manufacture of Chartered Accountants of Pakistan is the sole professional and accountancy body with the right to award the Chartered Accountant designation. Icap is the member of Ifac (International Federation of Accountants, Iasb (International Accounting Standards Board), Confederation of Asian & Pacific Accountants (Capa) and South Asian Federation of Accountants (Safa). The members of Icap have reached to 4,089 as of March 1, 2007 data.
Role of professional Accountants:
Accountants are independent firm advisors. Accountants can offer an unabridged range of services. Accountants can be registered auditors, can set up client's accounting systems, can be an consultant on tax planning, or a detector of frauds and embezzlements, can do budgeting and financial statement analysis, propose clients on financing decisions, provide expert knowledge and can help maintaining an ethical environment.
After discussing the basic concepts and role of professional accountants we are in a best position to ponder on what professional ethics is and why it is foremost in the field of accountancy.
Definition of Ethics
The word 'Ethics' is derived from the aged Greek word ethikos; means customs and habits. A major subject of philosophy which is the study of values and customs of a person or group and covers the diagnosis and employment of concepts such as right and wrong, good and evil and do's and don'ts.
Code of Ethics:
In the context of a code adopted by a profession or by a governmental organization to regulate that profession, an ethical code may be styled as a code of professional responsibility, which may dispense with difficult issues of what behaviour is 'ethical'. A code of ethics is often a formal statement of the organization's values on positive ethical and collective issues relating to the profession and practice of the professional knowledge. This also includes the ideas and procedures for exact ethical situations.
Ethics in professional Accountancy:
The normal ethical standards of society apply to citizen in professions such as medicine, law, nursing and accountancy etc just as much as to anything else. any way society places even higher expectations on professionals. citizen need to have trust in the quality of the complicated services in case,granted by professionals
Ethics in accountancy profession are invaluable to accounting professionals and to those who rely on their services. Stakeholders along with clients, credit grantors, governments, taxation authorities, employees, investors, the firm and financial society etc realize them as highly competent, reliable, objective and neutral people. professional accountants therefore, must not only be well Distinguished but also possess a high degree of professional integrity. Because of these high expectations, professionals have adopted codes of ethics; also known as codes of professional conduct. These ethical codes call for their members to say a level of self-discipline that goes beyond the requirements of laws and regulations. Each of the major professional relationship for accountants has a code of ethics.
As mentioned earlier, professional accountants can be of two types. One who work in firms or independently run those firms that provide accounting, auditing and other advisory services to clients; these are called collective practitioners. Others are those who are employees of organizations and may serve as internal auditors, management accountants, financial managers and financial analysts. Regardless of the role of accountants, they are adhered to code of ethics which are applied to their professional conduct although there are some special provisions for those in collective practice [Reference: Code of Ethics for professional Accountants-International Federation of Accountants (Ifac)].
International Federation of Accountants-Ifac:
The International Federation of Accountants (Ifac) is a federation of all accountancy bodies throughout the world. All the major international and national associations like Acca, Aicpa, Icma, Icap, Iasb etc are all its member organizations. The mission of Ifac, as set out in its constitution, is "the worldwide development and enhancement of an accountancy profession with harmonized standards, able to provide services of consistently high quality in the collective interest" [Ref: Code of Ethics for professional Accountants-Ifac]. In pursuing this mission, the Ifac Board has established the Ifac Ethics Committee to manufacture and issue, under its own authority, high quality ethical standards and other pronouncements for professional accountants for use around the world. The Code of Ethics establishes ethical requirements for professional accountants. A member body or firm may not apply less stringent standards than those stated in this Code.
The objective of setting this code of conduct is to harmonize these standards and practices on a global perspective. collective can only trust these highly professionals when it is made mandatory to eye and supervene correct regulations and codes throughout the world. A professional accountant is required to comply with the following underlying ideas mentioned in this Code of Ethics:[Ref: Section 100.4 Code of Ethics for professional Accountants]
· Integrity: A professional accountant should be honest and simple in all professional and firm relationship.
· Objectivity: A professional accountant should not allow bias, friction of interest or undue work on of others to override professional or firm judgments.
· Professional Competence & Due Care: A professional accountant has a chronic duty to say professional knowledge and skills at the level required to ensure that a client or boss receives competent professional service. A professional accountant should act diligently and in accordance with applicable technical and professional standards when providing professional services.
· Confidentiality: A professional accountant should respect the confidentiality of data acquired as a supervene of professional and firm relationships and should not disclose nay such data to third parties without proper and exact authority unless there is a legal or professional right or duty to disclose. This data should not be used for personal advantage by professional accountant.
· Professional Behaviour: A professional accountant should comply with relevant laws and regulations and should avoid any performance that discredits the profession.
Code of Ethics defined in 'Members Handbook' for members of Icap Pakistan is in conformity with:
· Ifac Code of Ethics and International Auditing Standards
· International Accounting Standards
· The manufacture of Chartered Accountants of Pakistan - Icap
· Relevant legislation
[Ref: Members Handbook-Icap]
This Code of Ethics has discussed in detail the role of Chartered Accountants in given situations. For example there are clear directives on prohibition of acceptance of gifts, long relationship with clients, advertising of firm's name exceeding prescribed limits, retention client's monies for no sound reason, disclosure of client's records (except ones that are allowed), acceptance of fees offered by client which is less than that prevailing in shop etc.
After discussing in detail the point of ethics in accounting profession, we are to finish the topic with this final note that accountancy as a profession is thorough and relied upon only when quality to rehearsal professional judgment based on a foundation of ethics; broad but deep technical excellence and strategic awareness are exercised by a professional accountant. Only then normal collective can trust the integrity of this profession.
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