level: Ethics of Accounting
Questions and Answers List
Chapter 10
level questions: Ethics of Accounting
| Question | Answer |
|---|---|
| How can a conflict of interest be managed | Transparency - one should be as transparent as confidentiality and prudence allows |
| Identify the 6 principles of professional codes of ethics | - Confidentiality - Integrity - Independence - Diligence - Objectivity - Public interest |
| Harms that arise from conflicts of interest | - They can damage the notion of fiduciary duty in a professional relationship - Trust in a profession can be damaged by practitioners - Can cause/give rise to a wider distrust in society |
| Describe the key features of a profession | Most professions are categorized by a strong sense of Independence which is: - they are not prejudice by the power/influence of those who stand to gain by a specific outcome - Independence is necessary for accountants to act ethically and with integrity |
| 2 Views of Professionalism | - the publics best interest (first priority) - regulation and law are the appropriate constraints |
| Issues faced by accounting professionals | - tax evasion - manipulating financial statements - confidentiality - using insider information for personal gain - integrity in admitting ones mistakes - conflicts of interest |
| Conflict of Interest | when interests conflict and affect a person, regardless of whether the conflict has any effect on that person |
| Constitutive rules | - are rules that define a practice - determines what the practice amounts too |
| Regulative rules | - are rules used external to the practice - regulates practitioners |