The document outlines the Code of Ethics for Professional Accountants published by the International Federation of Accountants (IFAC). It discusses the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality, and professional behavior. It also covers threats such as self-interest, self-review, advocacy, familiarity, and intimidation. The code provides guidance for professional accountants in business and in public practice on maintaining independence and complying with relevant laws and regulations.
The document outlines the Code of Ethics for Professional Accountants published by the International Federation of Accountants (IFAC). It discusses the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality, and professional behavior. It also covers threats such as self-interest, self-review, advocacy, familiarity, and intimidation. The code provides guidance for professional accountants in business and in public practice on maintaining independence and complying with relevant laws and regulations.
The document outlines the Code of Ethics for Professional Accountants published by the International Federation of Accountants (IFAC). It discusses the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality, and professional behavior. It also covers threats such as self-interest, self-review, advocacy, familiarity, and intimidation. The code provides guidance for professional accountants in business and in public practice on maintaining independence and complying with relevant laws and regulations.
The document outlines the Code of Ethics for Professional Accountants published by the International Federation of Accountants (IFAC). It discusses the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality, and professional behavior. It also covers threats such as self-interest, self-review, advocacy, familiarity, and intimidation. The code provides guidance for professional accountants in business and in public practice on maintaining independence and complying with relevant laws and regulations.
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International Federation of Accountants
Code of Ethics for Professional Accountants
Overview International Federation of Accountants International Federation of Accountants International Federation of Accountants International Federation of Accountants Fundamental Principles (110) • Integrity
– To be straight forward and honest in all
professional and business relationships
• Objectivity
– To not allow bias, conflict of interest or undue
influence of others to override professional or business judgments Fundamental Principles • Professional Competence and Due Care – To maintain professional knowledge and skill at the level required to ensure competent professional services based on current developments in practice, legislation and techniques – To act diligently in accordance with applicable technical and professional standards Fundamental Principles • Confidentiality – To refrain from disclosing confidential information acquired as a result of professional and business relationships without proper and specific authority to disclose unless there is a legal or professional right or duty to disclose
– To refrain from using confidential information
acquired as a result of professional and business relationships for personal advantage or the advantage of third parties Fundamental Principles • Professional behavior – Obligation to comply with relevant laws and regulations and avoid any action that discredits the profession Conceptual Framework Approach – Threats and Safeguards Threats • Self-interest • Self-review • Advocacy • Familiarity • Intimidation Self-interest threat – the threat that a financial or other interest will inappropriately influence a professional accountant’s judgment or behavior; Self-review threat – the threat that a professional accountant will not appropriately evaluate the results of a previous judgment made; or an activity performed by the accountant, or by another individual within the accountant’s firm or employing organization, on which the accountant will rely when forming a judgment as part of performing a current activity Advocacy threat – the threat that a professional accountant will promote a client’s or employing organization’s position to the point that the accountant’s objectivity is compromised; Familiarity threat – the threat that due to a long or close relationship with a client, or employing organization, a professional accountant will be too sympathetic to their interests or too accepting of their work; and Intimidation threat – the threat that a professional accountant will be deterred from acting objectively because of actual or perceived pressures, including attempts to exercise undue influence over the accountant. Evaluating Threats
When the professional accountant
identifies a threat to compliance with the fundamental principles, the accountant shall evaluate whether such a threat is at an acceptable level. Addressing Threats
a.Eliminating the circumstances, including
interests or relationships, that are creating the threats; b.Applying safeguards, where available and capable of being applied, to reduce the threats to an acceptable level; or c.Declining or ending the specific professional activity. Acceptable Level
An acceptable level is a level at which a
professional accountant using the reasonable and informed third party test would likely conclude that the accountant complies with the fundamental principles. Safeguards Safeguards are actions, individually or in combination, that the professional accountant takes that effectively reduce threats to compliance with the fundamental principles to an acceptable level. Prohibitions
When safeguards are never adequate
Objectives of the Professional Accountant in Relation to Non-compliance with Laws and Regulations 260.5 A2 Examples of laws and regulations which this section addresses include those that deal with: ● Fraud, corruption and bribery. ● Money laundering, terrorist financing and proceeds of crime. ● Securities markets and trading. ● Banking and other financial products and services. ● Data protection. ● Tax and pension liabilities and payments. ● Environmental protection • Public Safety Part 2 – Professional Accountants in Business
• Potential conflicts • Preparation and reporting of information • Acting with sufficient expertise • Financial interests • Inducements, Including Gifts and Hospitality • Responding to Non-compliance with Laws and Regulations • Pressure to Breach the Fundamental Principles Part 3 – Professional Accountants in Public Practice • Professional Appointment • Conflicts of Interest • Second Opinions • Fees and Other Types of Remuneration • Marketing Professional Services • Inducements, Gifts and Hospitality • Custody of Client Assets • Responding to Non-Compliance with Laws and Regulations Independence for Audit and Review Engagements • Firm includes network firm, except where otherwise stated • Independence of mind and independence in appearance • Public interest entities: additional provisions in Section 290 that reflect the extent of public interest in certain entities Independence for Audit and Review Engagements – cont’d • Documentation: conclusions regarding compliance with independence requirements, and substance of any relevant discussions that support those conclusions Independence for Audit and Review Engagements – cont’d • Financial interests • Loans and guarantees • Business relationships • Family and personal relationships • Employment with an audit client • Temporary staff assignments Independence for Audit and Review Engagements – cont’d • Recent service with an audit client • Serving as a director or officer of an audit client • Long association of senior personnel (including partner rotation) with an audit client Independence for Audit and Review Engagements – cont’d
• Provision of non-assurance services to audit clients
– Management responsibilities – Preparing accounting records and financial statements – Valuation services – Taxation services – Internal audit services Independence for Audit and Review Engagements – cont’d • Provision of non-assurance services to audit clients – IT systems services
– Litigation support services
– Legal services
– Recruiting services
– Corporate finance services
Independence for Audit and Review Engagements – cont’d • Fees • Compensation and evaluation policies • Actual or threatened litigation • Reports that include a restriction on use or distribution Independence for Other Assurance Engagements • Assurance engagements that are not audit or review engagements • Include related entities when reason to believe relevant to independence • Include network firms when reason to believe relevant to independence Independence for Other Assurance Engagements • Assertion-based assurance engagements – Independence required from assurance client (party responsible for the subject matter information, and which may be responsible for the subject matter) – When client not responsible for subject matter evaluate the threats firm has reason to believe created by interests and relationships with party responsible for subject matter
• Direct reporting engagements
– Independence required from assurance client (party responsible for the subject matter) Independence for Other Assurance Engagements
• Multiple responsible parties
– Firm may take into account whether interest or relationship with a particular responsible party creates a threat. Consider: • Materiality of subject matter information (or subject matter) for which the particular responsible party is responsible
• Degree of public interest associated with engagement
END OF PRESENTATION International Federation of Accountants www.ifac.org
