Accountants' Ethical Dilemma: Confidentiality vs Public Interest

This assignment delves into the ethical dilemma faced by public accountants who must balance their duty of confidentiality to clients with their obligation to serve the public interest. It explores the importance of public trust in the accounting profession and the challenges posed by factors influencing corporate reporting. The role of organizations like IFAC and the IESBA in establishing ethical guidelines, particularly regarding non-compliance with laws and regulations (NOCLAR), is discussed. The assignment analyzes how NOCLAR helps accountants navigate this complex situation while upholding their professional integrity.

Running head: ETHICS
Ethics: APES 110
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Author’s Note:

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Ethics are often been stated as the standards along with the rules that can be made use of
in judging what is correct and what if not in the behavior of the individuals. The simplest
expression for the ethical behavior is any sort of act that is being stated to be satisfactory to the
community along with their convictions and their prospects (George & Harvey, 2014). Ethics is
often been used as one of the significant values for any sort of professional body in developing
the professional conduct of its members through internal basis along with externally. Together,
the professional accounting bodies have presented the code of ethics as APES 110 that is being
needed for practicing by the professional accountants (Cheffers & Pakaluk, 2005). Having such
sort of codes are significant in gaining the trust of the public and the success of the profession of
accounting along with certain other professions.
For becoming a professional member it is imperative in understanding the importance of
ethic in developing the professional conduct. In the business environment that is competitive
people at times tend to behave in unethical manner. Such unethical behaviors generally have a
considerable impact on the matters of the society. Society is mainly dependent on excellence of
information and the services offered by the standard professionals. Therefore, it becomes
significant for the professional bodies in having certain set of ethical rules in developing
regulation contained by their members as they symbolize the professional body in public.
APES 110 Code of Ethics for Professional Accountants (Code) is being subjected by
the Accounting Professional and Ethical Standards Board (APESB). This independent body
was formed in 2006 as one of the main initiatives of CPA Australia and Chartered
Accountants within Australia and also in New Zealand. According to Azimi & Naim, (2015),
the main role and responsibility of APESB is in developing and issuing the professional and

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ethical standards for the interest of the public that relate to members of CPA Australia and the
other two accounting bodies of Australia.
This code is mainly based on the Code of Ethics for the Professional Accountants
concerned by the International Ethics Standards Board for Accountants (IESBA) of the
body of International Federation of Accountants (IFAC) (Cheffers & Pakaluk, 2005).
Members who have been practicing within Australia or anywhere across the globe needs to
comply with the code unless they are being prohibited from doing so by certain appropriate
regulations and laws.
The Code makes use of the words ‘shall’ for imposing an obligation on the firm or the
member. This code is generally segregated into three parts where Part A is being applied to all
the members, Part B is being applied to the members in the practice public and Part C is being
applied to the members in business.
Proper conduct of disagreement of interests is one of the issues that crops up very
frequently before the various punitive bodies. It is stated to be one of the most uncomplicated
segments of Code of Ethics; it is a section where members emerge in tripping up on amazingly
regularly. Most of the members would in all probability position that they would certainly be
identifying if they were being conflicted. Ethical codes are taken in as the primary principles that
the accounting professionals decide to abide by for enhancing their profession, maintaining the
trust of public along with demonstrating the factor of honesty. Section 220 of APES 110 states
that conflict of interest generates a threat to the factor of objectivity and might produce threats to
the other fundamental standards (Clayton & Staden, 2015). A member should never allow
conflict of interest in compromising the judgment related to professionalism or business.

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Ethics and independence are two of the factors that goes hand-in-hand in the profession
of accounting. A complex constituent of trust is in making the decisions of unbiased nature along
with the recommendations that suits and benefits the client. For instance, conflicts of interest
demands disclosure under the independent strategies. It is important for the accounting
professionals in remaining independent and objective and that the recommendations that are
being made are not subject to any kind of outside persuasion. The client’s belief should not be
hampered as it is with much belief that the client has entrusted upon the accountant certain
significant work.
Expression of integrity is being honest and straightforward in all the relationship related
to business and professionalism. Upholding of the integrity needs that accountants do not
correlate themselves with the information that they suppose is generally misleading or that
misleads by oversight. Information of such nature would only jeopardize the client’s work
proceedings. People provide every possible document and details to these accounting
professionals, so it is upto the professional accountants in not disclosing the temperament of a
probable merger by an accounting professional. The Section 140 of APES 110 Code of Ethics
states about the confidentiality factor. Making use of the confidential information that is being
acquired as the result of the relationships within the business and professionalism for their
personal advantage of to the other existing third parties is restricted highly. Unless there is any
legal or specialized grounds in doing the same, violation of the trust by the accounting
professional is not required.
Ethics need the accounting professionals in complying with the laws along with the
regulations that would be governing their jurisdictions. Avoidance of such actions that might
have a negative effect on the repute of the vocation is stated to be sensible pledge that the

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business partners and others might expect. APES 110 states that no members should indulge
himself in making exaggerated claims for the services that they would be able to provide along
with the qualifications they enjoy or the experience they have achieved over the years.
The professional accountants have been described of playing certain multifaceted roles,
they are entitled to not only maintaining the highest standards of accounting but also helping the
organization along with other individuals in acting in an ethical manner. Closely been associated
to the protection of the interest of the public is the thought that the public accountants are
required to be trusted in providing the value of the public (Azimi & Naim, 2015). Accountants
would be losing their authenticity as the defender of the interest of the public if there is any lack
of public trust. This profession has a broader reach within the society and in the international
capital market. In the most primary of ways, confidence in the financial data generated by the
business professionals generally forms the center of the trust of the public along with the public
value.
The vibrant forces that have been structuring the form and substance of corporate
reporting along with capturing of the complicated and environmental factors have been
challenging this profession. As per Han Fan, Woodbine, & Cheng, (2013), important leadership
has been depicted by the International Federation of Accountants (IFAC) in positioning the
accountants as important players. The Codes of Ethics are being promulgated by several
organizations.
The challenging obligations in maintaining the confidentiality of the clients and also
acting in the interest of the public are certain things that many of the accountants have
experienced over the years. In the month of July, the IESBA that is in the habit of developing the

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Code of Ethics for the Professional Accountants, has been able to issue an edition: Responding
to Non-Compliance with Laws and Regulations ( NOClAR). NOCLAR have been able to set
out on the ways the accountants have been able to respond at times when they become conscious
that an employer or any client has committed any sort of illegal act with the regulations and laws.
These guidelines make sure that the accountants have the opportunity in fulfilling their needs for
integrity along with the professional behavior and acting accordingly as per the interest of the
public.
Primarily, NOCLAR tackles the probable predicament for the accountants between the
confidentiality of the clients along with the overarching liability in acting to the interest of the
public (Cheffers & Pakaluk, 2005). It generally facilitates for the precise circumstances where
revealing definite or supposed acts of illegality to an suitable influence would not be measured a
breach in the duty of the confidentiality along with providing the structure for such revelations.
However, it does not meet the criteria that disclosing a real or suspected act of illegality that is
being precluded if that is been stated to be divergent to the regulations or the laws.
This is stated to be in line with the requirement of the Code where it has been stated that
if a professional accountant is being prohibited from obeying with positive segments of this Code
by the regulation or the law, the proficient accountant needs to conform to all the Code parts. It
can be concluded by stating that ethical help is at hand for struggling with the factor of
confidentiality of the client and gaining his trust on the accounting profession.

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Reference:
Azimi, D., & Naim, M. (2015). Impact of Organization Internal Factors on Ethical Intensity of
Accountants in Afghanistan.
Cheffers, M., & Pakaluk, M. (2005). Understanding accounting ethics. Manchaug, MA: Allen
David Press.
Clayton, B. M., & Staden, C. J. (2015). The Impact of Social Influence Pressure on the Ethical
Decision Making of Professional Accountants: Australian and New Zealand
Evidence. Australian Accounting Review, 25(4), 372-388.
George, G., Jones, A., & Harvey, J. (2014). Analysis of the language used within codes of ethical
conduct. Journal of Academic and Business Ethics, 8, 1.
Han Fan, Y., Woodbine, G., & Cheng, W. (2013). A study of Australian and Chinese
accountants’ attitudes towards independence issues and the impact on ethical
judgements. Asian Review of Accounting, 21(3), 205-222.