Characteristics And Guidelines Of Confidentiality In Management Accounting

Explaining the characteristics of accounting ethics related with Confidentiality principles found across the above professional bodies:

The assessment aims in identifying the confidentiality principles that are used by professional bodies all around the world. The confidentiality principles relevantly an effective way for securing the data of their clients, while minimising any kind of unethical conduct of the organisations. Furthermore, the assessment also indicates the main aspects of confidentiality in management accounting that needs to be evaluated as a guideline for the new business. In addition, the five different scenarios are also evaluated where confidentiality is not followed, which might help in minimising unethical measures taken by organisations to manipulate their annual report. The significance of confidentiality is relatively depicted, which needs to be followed by accounting bodies while conducting their operations.

There are different principles of confidentiality, which needs to be comprehended by accounting firms all around the world. with the help of confidentiality principles, the organisations are able to minimise the risk of extensive competition loss from Data leakage. Chartered Accountant firms and accounting firms are relatively focused on the confidentiality principle where no data needs to be provided to competitors for safeguarding the interest of the organisation (White 2017). The principles of confidentiality are relatively depicted as follows.

• The first principle of confidentiality directly indicates that not only the information needs to be confidential but reasonable measures needs to be taken for preserving the confidentiality of the organisations.  the nature of the information is a relatively dependent on its confidentiality condition and whether it should be preserved using adequate measures. Furthermore, the professional Accountants relatively assume that all the unpublished information about the client is considered confidential document, which needs to be stored and preserved from manipulation. the relationship between the professional Accountants and the organisation is relatively considered to be confidential (Powell, Hickson and Johnston 2016).
• The second principle of confidentiality relatively imposes and obligation on all the professional Accountants to refrain from different level of disclosing. The professional Accountants are not able to disclose outside the employees or organisations about the confidential information that has been acquired during the accounting process. The information related to business and other specific notes, which is used by accountants During the preparation of the financial account needs to be secured. However, the specific authority can view the document unless and until there is a legal of professional right for disclosure of the sensitive information. however, under no circumstances the information cannot be disclosed to competitors of the organisation.
• The principle of confidentiality also imposes publications on the Accountants for not disclosing any kind of information for their personal relationship and benefits.  The disclosure of the information cannot be for personal advantage for themselves or for the third party, which directly nullifies the impact of confidentiality provisions between accountant and the organisation. the accounting firm directly needs to hold and Secure the information of the organisation, while refraining from disclosing the information for personal gain (Rosenthal 2015).
• The third principle of confidentiality is regarding the social environment, where the professional Accountants needs to maintain confidentiality while being a lot of the possible in advent disclosure which could be conducted to business Associates immediate family members. Therefore, this principle directly indicates that the professional Accountants cannot disclose the information regarding the organisation to their social circle or immediate family members, as it might violate the confidentiality provision.
• The professional accountant also needs to maintain confidentiality regarding the information of the clients for employees at all time. the information of past and present client needs to be considered confidential by the accounting organisation, while all the information gathered from third parties is also considered confidential. This relatively indicates that under no circumstances the accounting organisation can conduct the disclosure of adequate information regardless of the origin of the information (Courage and Calzavara 2015).

The main aspects of confidentiality that needs to be accommodated by the management accountant firm into the guidelines are depicted as follows.

Implementing the competency level:

The adequate competency level needs to be implemented as a relevant guideline for the Management Accounting firm, as it might help in maintaining an adequate level of professional expertise. This might eventually help in developing the knowledge and skills required to support the operations of the management accounting firm. The relevant guidelines also need to be implemented regarding the professional duties loss regulations and Technical standards that needs to be maintained by the Accountants in conducting the accounting operations. Furthermore, it also helps in providing accurate recommendations with clear and concise information that could be used by organisations to improve its profitability.  the accounting firm is relatively liable to present the information regarding different aspects of the business which would help in improving the return generation capability of the organisation. Lastly, the management accounting firm Need to recognise adequate professional limitations and constraints that could eventually increase confidentiality of the data used by the accounting firm (Beale, Gullifer and Paterson 2015).

The increment and confidentiality level also need to be conducted by the accounting firm where the information of the client cannot be disclosed to anyone without the acknowledgement of the client. However, the disclosure is authorised or legally required by the accounting form while conducting the disclosures for the organisation. Moreover, the counting from also needs to be free from using the confidential information for unethical and in legal measures, which might directly provide advantage to the firm. Lastly, the collected information needs to be monitored and controlled by the accounting firm for reducing the chances of leakage.

Increment in the integrity level could also be conducted by the accounting firm which might help in mitigating the actual conflicts of interest among the potential parties. The reduction in conflicts is one of the major concern for the accounting from where it operation would be affected. Moreover, the accounting firm also reference from engaging into any conduct condom that might hamper its capability to carry out the duties ethically. The employees need to minimise the occurrence of conflict within and outside the organisation. Therefore, the employees need to follow an adequate measure where no engagement should be conducted on activities that might discredit the profession of accounting (Joseph 2017).

Depicting the main aspects of Confidentiality in management accounting that should be used as guidelines:

Increment in credibility needs to be conducted by the employees of the accounting firm by communicating information fairly and objectivity to the customers. This would eventually help in maximizing the disclosure of all the relevant information, which could support the customer to improve its current financial capability. the disclosure of the information needs to be accurate and understandable inform of report, which could be analysed by the analyst for detecting the current financial capability of the organisation.  the accounting firm also needs to disclose the delay or deficiency in information that is conducted by the organisation through internal controls. This will eventually improve credibility of the company among customers and stakeholders of the organisations.

There are five different scenarios of confidentiality that needs to be understood by the staff of the accounting firm to understand in the guidelines laid down by the regulatory bodies.

Example 1: The first example is regarding the unethical measures that is followed by an organisation to formulate their annual report.  accounting firms needs to provide all the relevant details to the appropriate authorities wild affecting the actual financial position of the organisation and the unethical measures it is used to cook its books. The staff can directly approach different impurities and do not follow the confidentiality clause as the organisation is using unethical measures in their operations. Before the crisis accounting bodies are relatively allowed the organisation to manipulate their annual report, which was disclosed after their Bankruptcy (Marcum and Perry 2017).

Example 2:  The second example is regarding the continuous conflict between the accounting body and the client can be resolved with the help of legal advice from appropriate regularities. The professional accountant can consider obtaining legal advice before it will be charged with fraud. Companies using unethical measures and violating the environmental clauses can be reported by the accountant to the appropriate authorities. In this scenario, the accountant is relatively helping the society to minimise the adverse effect of continuous greed and manipulation conducted by the organisation.

Example 3: The third example focuses on the illegal activities that is conducted by the organisation to increase its profits.  there are many instances where individuals have become whistle-blowers and disclosed the unethical and illegal activities that is conducted by organisation to maximize their profits. Therefore, the employees of the accounting form need to understand the level of illegal activities that is conducted by their clients report to the appropriate authorities without considering the confidentiality clause (Klonowski 2018).

Example 4: The fourth example relatively focuses on the non-implementation of corporate governance within the organisation, which is directly promoting racism. The accountants can directly contact authorities regarding the noncompliance of corporate governance within the operations of the organisation.

Example 5: The fifth example relatively focuses on the activities of the organisation which can be reported by the accounting form if the use unethical measures.

Conclusion:

From the overall evaluation it could be identified that confidentiality is an adequate measure which needs to be complied by the accounting form. However, there are different variations in which the confidentiality clause can be ignored by the accounting firms minimising the negative impact of unethical measures used by organisations. Confidentiality is relatively an adequate measure which allows the organisation to reduce the possibility of information leakage to its competitors. Moreover, the accounting firm is liable for all the relevant information disclosures that is conducted on behalf of the organisation, where the preservation of non-disclosed information is relatively adequate. health, it would be identified that with the help of confidentiality clause organisations are able to minimise the information leakage that could be conducted buy accounting firms. Different level of disclosures that could be conducted by the accounting firm is adequately defective. Moreover, the provisions and examples regarding the disclosure of unethical conduct by the organisations is adequately depicted in the assessment.

Reference and Bibliography:

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