Discuss About The Code Of Professional Ethics In Accounting?
This essay is developed to understand the ethical practices concerned to the code of practices that are adopted by the Australian Accounting Standard Board for the professional accountants too follow in relation to generate public interest and confidentiality. It also includes the evaluation of APES 110 Code which is also crucial to strengthen the ethical standard that should also be followed by the professional practitioners under the CPA Australia.
Accounting profession is significant to influence the confidence of public through delivering the valuable service to the clients. It is also stated that the public values can also be created by ethics and transparency because everyone wants to have the actual information with her to characterize and promote the standard corporate governance.
Figure: Perception of Public Value
(Source: Cpaaustralia, 2014)
Australian accountancy board is lined up with the follow of rules and regulation in order to develop the public confidence and approach to the interest of the same for CPA members. Ethical codes are developed by the top Australian bodies such as APESB, which is responsible for the issuing of ethical codes that are adopted by the accounting members in order to attract the general public towards the fair and ethical accounting practices (Smsfsuperauditors, 2012). At the same time, these codes are applicable to the all Australian CPA members who are working in domestic or overseas county under which they are required to follows the ethical practices to make more approachable the accounting standards at global level. Basically these codes are issued by the accounting body as International Ethics Standard Board for Accountants, to guide and impose the practice of ethical standards so that member should easily aware and protect the interest of public and make the public more without biasness and undue influence of the another member or outside people and gimped to unethical practice.
ACA is also an ethical accounting body that also enforces the member to ensure the ethical practice and follow the fundamental principles to comply the professional members for not to indulge into the illicit activity and may distort the professional regulation (Apesb, 2017). It is also stated that these ethical compliance and practices are supposed to safeguard the public interest so that it can maintain the relationship with the general public in relation to have faith in accounting professional and people can believe over the practices of professional accountants. These codes are amended time to time to include the fair judgment and provide the assured engagement of CPA member in public interest. These codes are very important to evaluate the conducts of professional member over their accounting practices and take an effective decision to imposed the code of ethical denomination or the decision related to the discipline are also made by the accounting supreme body (Psc, 2016). Along with this, the behavior of member is assessed over the particular standards as any client complaint against the professional those have not follow the accounting regulation and the client is not happy with the process of member than the accounting body may impose the disciplinary duty to so that the member can comply with these standards. As it is also endowed that the professional accountants are playing imminent role and major contributor to the corporate governance practices that are fair and judgmental to carry out the accounting process. With this, it is also known that many of accountants indulged into the malpractices and support the corporate through showing the fruitful position of company so that the general public can easily approach and prefer the particular business to attract towards the corporate performance and be a part of the same, which is not good for the future contribution and it also melt down the brand image of company which is not presented its financial activities in ethical manner. The ethical code are inclined to the using “Shall” word that is the concern of essential that are needful for the member of the firm. In respond to this, the member of Australian accounting board might be access over the practice of unethical and misleading statement of information.;
Principles are the outline, on basis of these the code is practiced and implemented over the professionals of accounting. APES has issued the principles of code so that the ethical practices are easily assessed in order to maintain the relationship by members with the general public. Major principles of ethical codes are as follows
Integrity: It is aimed that the professional should be honest and straightforward in their possession or profession so that the general public could not be harmed and public interest can created positively. At the same time, it also allows to follow the rules and regulation in professional manner not out of that so it can rely through standards of professional ethics.
Due Care and Professional Competence: Accountant should have the professional knowledge and skills that the client wants to ensure the adequate presentation of financial information in relation to generate competence and legislation should also be followed diligently so the desired solution can be provided to the perspective client (Apesb, 2010).
Confidentiality: Confidentiality is another principle that requires the security and protection of information to which not to share with the third party without any consent of the firm’s management. Disclosing the confidential information by professional accountant influence the public not to believe over the members due to the safety concern of the crucial information related to the firm that might distort the expectations of client (Apesb, 2010).
Objectivity: It is also important principle for code of professional ethics that allow the accountants to not to create biasness due to the undue influence to the client.
The code of APES 110 is basically concerned to the integrity of professional accountants that advice to that the member should deal in fair and judgment basis and malpractices should not be, for this the member himself would be responsible to disclose the entire information to the client about the further process and confer the better service according to the professional ethics. With this, omitted and misleading information should also not be treated because of the personal benefits would affect the general public that the false information is also judged by the professional accountants and code of ethics are not followed. APES 110 code is applicable from July 1, 2011 in relation to the previous codes of professional ethics and it is issued up to the November 2013 (Cheffers and Pakaluk, 2007). Along with this, it is declared over the corporation act 2001for the purpose of review the audit and enforceable to impose the legality over the members and firms also. The major responsibility of the accountant is to determine the public interest and not behave by unprofessional practices otherwise the authority body would impose the legal obligation in order to pose over the misleading statement or information presentation. APES 110 are preamble to the Australian Accounting Standard (Icaew, 2017). This code is concerned to the maintaining the relationship with client and professional accountants but it is argued that these codes are not adequate to develop the moral obligations with respect to the ethical measurement of service. It is also assessed that there is a positive relationship between the attitude of client and professionals. This code involves the member those are working with the auditing and registering schemes for the client. On the other hand, the issues are also arising due to the increasing profit for the business and both client and professional indulged into the bad conduct through showing the misleading financial information.
Conceptual framework shall be inclined to the determination of threats and also find out the importance of threats, with this, safeguards are also applied to the codes structure to prevent the activities that become threats and minimize the perspective threats by a relevant process (Publicaccountants, 2013). Variant threats arise due to the self interest, advocacy threats, intimidation threats, self review threats and familiarity threats. On the other hand, the conceptual framework of codes is fall into as protection measures provided by the regulation and professionals in order to deliver the valuable service to the public. With this, an environmental base safeguard framework through which the practical evidence base compliance is set out to develop the interest aspect of general public.
Conclusion
On the basis of above analysis of APES 110 code of professional ethics, it can be analyzed that the ethical practices are also important in accountancy because of the generation of public interest through transparency and following the codes of conduct of ethical rules and regulation by the professional accountants. On the other hand, it can also be stated that the only codes not derive the significant value to the clients; their perspective to assess the practical review of the accounting information might also be supportive.
References
Apesb, (2010). APES 110 Code of Ethics for Professional Accountants. Retrieved from: https://www.apesb.org.au/uploads/standards/apesb_standards/standardc1.pdf
Apesb, (2017). APESB issues amendments to APES 110 Code of Ethics for Professional Accountants. Retrieved from: https://www.apesb.org.au/uploads/standards/technical_update/30052017102512_TU_2017_2_NOCLAR_NAS_Amendments_APES_110_May_2017_Final.pdf
Cpaaustralia, (2014). AN OVERVIEW OF APES 110 CODE OF ETHICS FOR PROFESSIONAL ACCOUNTANTS. Retrieved from: https://www.cpaaustralia.com.au/~/media/corporate/allfiles/document/professional-resources/ethics/an-overview-of-apes-110-code-of-ethics.pdf?la=en
Icaew, (2017). Code of Ethics A. Retrieved from: https://www.icaew.com/membership/regulations-standards-and-guidance/ethics/code-of-ethics-a
Psc, (2016). RELEVANCE AND PROFESSIONAL ASSOCIATIONS IN 2026. Retrieved from: https://www.psc.gov.au/sites/default/files/Relevance%20and%20Prof%20Associations%20in%202026.pdf#page=95
Publicaccountants, (2013). Compiled APES 110 Code of Ethics for Professional Accountants. Retrieved from: https://www.publicaccountants.org.au/media/711182/APES-110.pdf
Smsfsuperauditors, (2012). APES 110: Code of Ethics for Professional Accountants Fact Sheet. Retrieved from: https://www.smsfsuperauditors.com.au/APES-110-fact-sheet.pdf
Cheffers, M. and Pakaluk, M. (2007). Understanding Accounting Ethics – 2nd Edition. USA: Allen David Press.
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