Code of Ethics of Professional Accountants

CODE OF ETHICS OF PROFESSIONAL ACCOUNTANTS
Code of Ethics
• Part A – Professional Accountants in General
• Part B – Professional Accountants in Public Practice
• Part C – Professional Accountants in Business
Objectives
The Code recognizes that the objectives of the accountancy profession are to work to the
highest standards of professionalism, to attain the highest levels of performance and generally
to meet the public interest requirement set out above.
1. Credibility
In the whole of society there is a need for credibility in information and information systems.
2. Professionalism
There is a need for individuals who can be clearly identified by clients, employers and other
interested parties as professional persons in the accountancy field.
3. Quality of Services
There is a need for assurance that all services obtained from professional accountant are
carried out to the highest standards of performance.
4. Confidence
Users of the services of professional accountants should be able to feel confident that there
exists a framework of professional ethics which governs the provision of those services.
Fundamental Principles
1. Integrity
A professional accountant should be straightforward and honest in performing professional
services.
Integrity implies not merely honesty but it requires being brave enough to fight for what you
believe in.
A professional accountant should not be associated with information where he believes that
the information contains misleading, incorrect, and incomplete statements.
2. Objectivity
A professional accountant should be fair and should not allow prejudice or bias, conflict of
interest or influence of others to override objectivity.
Imposes the obligation on all professional accountants to be fair, intellectually honest and free
from conflicts of interest.
3. Professional Competence and due Care
A professional accountant should perform professional services with due care, competence
and diligence and has a continuing duty to maintain professional knowledge and skill at a level
required to ensure that a client or employer receives the advantage of competent professional
service based on up-to-date developments in practice, legislation and techniques.
Professional Competence
Divided into two separate phases:
 Attainment of professional competence
 Maintenance of professional competence
Due Professional Care
– Responsibility to perform professional services in accordance with technical and
professional standards, carefully, thoroughly, and on timely basis.
4. Confidentiality
A professional accountant should respect the confidentiality of information acquired during the
course of performing professional services and should not use or disclose any such information
without proper and specific authority or unless there is a legal or professional right or duty to
disclose.
Accountants who acquire information in the course of performing services shall neither use nor
appear to use that information for personal advantage or for the advantage of a third party.
When to disclose?
 Permitted by client or employer.
 Required by law.
 Professional duty or right to disclose confidential information.
5. Professional Behavior
A professional accountant should act in a manner consistent with the good reputation of the
profession and refrain from any conduct which might bring discredit to the profession. The
obligation to refrain from any conduct which might bring discredit to the profession requires IFAC
member bodies to consider, when developing ethical requirements, the responsibilities of a
professional accountant to clients, third parties, other members of the accountancy profession,
staff, employers, and the general public.
6. Technical Standards
A professional accountant should carry out professional services in accordance with the
relevant technical and professional standards. Professional accountants have a duty to carry out
with care and skill, the instructions of the client or employer insofar as they are compatible with
the requirements of integrity, objectivity
In addition, they should conform with the technical and professional standards of the following;
Board of Accountancy (BOA)/Professional Regulation Commission (PRC);Securities and
Exchange Commission (SEC) Auditing Standards and Practices Council (ASPC); Accounting
Standards Council (ASC);Relevant legislation.
Conceptual Framework Approach
Requires accountants to:
• Identify threat to compliance with fundamental principles
• Evaluate the significance of threats identified; and
• Apply safeguards, when necessary, to eliminate the threats or reduce them to an acceptable
level.
Threats to Compliance
The circumstances in which the professional accountants operate may create threats to
compliance with fundamental principles. Such threats fall into one or more of the following categories:
Self – interest; Self – review; Advocacy; Familiarity; and Intimidation.
1. Self-interest threats
– Financial or other interest will inappropriately influence professional accountants’
judgement or behavior.
2. Self-review threats
– The professional accountant will not objectively evaluate the result of the previous
judgement made or service performed in forming a conclusion about the subject matter of
the engagement.
3. Advocacy Threat
– Threat that a professional accountant will promote a client’s or employers’ position to the
point that the professional accountant’s objectivity is compromised.
4. Familiarity Threat
– threat that due to a long or close relationship with a client or employer, a professional
accountant will be too sympathetic to their interests or too accepting of their work
5. Intimidation Threat
– threat that a professional accountant will be deterred from acting objectively because of
actual or perceived pressure, including attempts to exercise undue influence over the
professional accountant.

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