Accountant's Ethical Responsibilities

This assignment delves into the ethical obligations inherent to the accounting profession. It emphasizes the paramount importance of serving the public interest, adhering to fundamental ethical principles, and mitigating threats to compliance. The text examines how these standards contribute to maintaining public trust and confidence in accounting.

Running head: APES110 1
Contribution of APES110 towards Developing Public Trust
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Contribution of APES110 towards Developing Public Trust
It is important for the accounting profession to restore public trust and confidence. Zucker
(1986) notes that public trust is the foundation upon which public trust was founded. Accountability and
governance reforms have identified the need for corporations and accounting profession to become
increasingly accountable than before. Professional accountants and corporations require support from
various stakeholders in order to achieve their accountability objective. To gain this support, there must
be trust among the parties. Members of the accounting profession are expected to do the right thing by
respecting the interest of the stakeholders (Brooks & Dunn, 2011). The accounting profession is
expected to develop public trust by conducting themselves in a manner geared towards serving their
interests.In 2006, the Australian Professional and Ethical Standards Board (APESB)laid down the
APES110 Code of Ethics for Professional Accountants to improve public confidence and prevent
undesirable accounting practices (Han Fan, Woodbine, & Cheng, 2013). To provide international
credibility, the APES 110 is aligned with the IFAC Code issued by the International Ethics Standards Board
of Accountants (IESBA).
In accordance with APES 110, members of CPA Australia are mandated to comply with the
fundamental principles of objectivity, integrity, due care, professional competence, and behavior. In
addition to satisfying a client’s needs, a professional accountant is required to act in public interest.
Although Pflugrath et al. (2007) notes that, when making decisions on ethical issues, accounting
professionals in Australia often pay attention to ethical codes of conduct, there exist malpractices that
reduce public trust in the accounting profession. Accounting credibility crisis from the Enron case, Arthur
Andersen and Worldcom are examples of cases situations whereby ethical codes of conduct failed in
ensuring public trust (Brooks & Dunn, 2011). The underlying issue of any financial misconduct case is
usually related to trustworthiness. Trustworthy and ethical behavior is essential in accounting and
business in general. Due to the fundamental role of accountants in providing financial information to
lenders, investors and other stakeholders, they are required to behave responsibly while in their
professional capacity and maintain trustworthy and reliable records (Caliskan, Akbas, & Esen, 2014).
In order to enhance public trust in the accounting profession, the first aspect to pay attention to
is the initial engagement with possible clients. Section 210 of the APES 110 Code underlines the ethical
criteria an accountant should comply with before accepting a new engagement or client. An accounting
professional is required to consider if the engagement will create threats that may hinder his or her
compliance the fundamental principles described in the Code. These threats may result from

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questionable accounting practices or illegal client activity. Furthermore, as per Section 220 of the Code,
accounting professionals in public practice are required to identify ethical conflicts of interest and apply
relevant safeguards to cope with them. Compliance with Section 210 and Section 220 of the Code would
mean that the accounting professionals will provide ethical services that are in line with the public
interest right from the start. The effect of this is an increased public trust in the accounting profession.
As is the case with any professional code,the underlying fundamental of the APES110 Code is
independence. Independence is importantin preserving integrity and objectivity. To adopt the
independence principle, Sections 290 and 291 of the Code underline the independence requirements
required of accounts in public practice.The Code looks at accounting independence from two
perspectives; independence of mind and that of appearance. Independence of mind requires accounting
professionals to uphold their objectivity and resist influences such as client pressure or any other factor
that may hinder their independence. Independence in appearance relates to the conclusion of an
informed third party on whether objectivity and integrity of an accounting professional have been
compromised. By maintaining both mind and appearance levels of independence, accountants will be
able to conduct themselves in such a way that reassures the public that their reports and analyses are
accurate and free from internal and external threats
Members of the public usually seek accounting services from an accountant knowing that they
can trust the individual's service delivery ability in consistency with professional and ethical standards.
The Code requires a member to present internal and external financial information honestly and in
accordance with Australian Accounting Standards. This provision enhances public trust by ensuring
confidence in the financial information provided by practicing accounting professionals. Members are
also required to act in sufficient professional expertise. These all contribute towards cementing a high-
quality outlook on the accountancy profession. Members of the public such as investors will have faith
in the information provided and make confident investment decisions.
Self-interest is among the greatest threats that hinder the development of public interest.
According to Sections 240 and 260 of the Code, self-interest is created as a result of issues related to
gifts, hospitality, fees and other forms of remuneration.The quoted fee for an engagement may
influence the performance of an accounting professional in accordance with accounting
standards.Section 260 of the Code stipulates that an informed third party would consider an offer to an
accounting professional as inconsequential to the ethical decisions made by the accountant. Safeguards
should be applied to offers that hinder the delivery of accounting services as per the fundamental

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principles outlined in the Code. Accounting professionals must put thepublic interest above their own.
Their practices should be geared towards enhancing the community’s well-being(Dellaportas &
Davenport, 2008).The public will develop greater trust to an accounting profession where the providers
of the service are willing to put their self-interest aside for the greater good. Regulations of the
APES110, therefore, contribute to developing greater trust of the public in the accounting profession
Section 250 of the Code describes the manner in which an accounting professional may market
his or her services. The modes of marketing such as advertising must not give a negative portrayal of
ethical standards that govern the delivery of the accounting services. The media is a powerful tool in
influencing the perspective, attitude, and decisions made by members of the public. Section 250 of the
APES110 Code, therefore, regulates the interaction between an accounting professional and the
marketing media. Marketing campaigns that complement the ethical and professional standards
observed by members of the accounting profession will go a long way in ensuring the development of
greater trust of the public in the accounting profession.
Objectivity is among the fundamental principles governing the accounting profession. The
ASPES110 Code emphasizes of the importance objectivity in Section 280. Compliance with the
objectivityprinciple requires a member in public practice to refrain from engagements with parties in
which he or she is related to, or has an interest. Objectivity is core in enhancing public trust. An
accountant must deliver services free from favor towards family and other personal or business
relationships. In the modern evolving business environment, there are new and complicated challenges.
Furthermore, the expectations of the public are higher than before. A professional accountant’s value is
based upon their accountability to their organizations and more importantly, their relevance to
promoting public interest (Baker, 2005).
In conclusion, Brooks & Dunn (2011) state that acceptance of their responsibility to the public is
the distinguishing mark of any profession. In order to maintain a conducive business environment, the
accountancy profession is expected to maintain integrity and objectivityin serving the public which
consists of lenders, the government, investors, employees, employees, clients, and business community
in general. This requirement imposes a public interest responsibility to the accountancy profession.
Therefore, an accounting profession is not only responsible to his or her client, but also to the public. In
order to provide public value, accountants must be trustedin their initiatives to protect public interest.
In its aim to facilitate the enhancement of public trust, the APES110 Code for Ethics for Professional
Accountants requires members to identify and apply safeguards to threats that may hinder their

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compliance to fundamental principles.Regardless of the task or role an accountant has, these ethical
standards must be complied with. Ensuring sustainable confidence and trust in the accounting
profession requires the collective effort of all affected parties (Gray & Collison, 2002).

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References
Accounting Professional and Ethical Standards Board (APESB). (2013). APES 110 Code of Ethics for
Professional Accountants.
Baker, C. R. (2005). What is the meaning of “the public interest”? Examining the ideology of the
American public accounting profession. Accounting, Auditing & Accountability Journal, 18(5),
690-703.
Brooks, L. J., & Dunn, P. (2011). Business & professional ethics. Cengage Learning.
Caliskan, A. O., Akbas, H. E., & Esen, E. (2014). Ethical Dilemmas and Decision Making in Accounting.
In Corporate Governance (pp. 241-252). Springer Berlin Heidelberg.
Cheffers, M., & Pakaluk, M. (2007). Understanding accounting ethics. Sutton, MA: Allen David Press.
Dellaportas, S., & Davenport, L. (2008). Reflections on the public interest in accounting. Critical
perspectives on accounting, 19(7), 1080-1098.
Gray, R., & Collison, D. (2002). Can’t see the wood for the trees, can’t see the trees for the numbers?
Accounting education, sustainability and the public interest. Critical Perspectives on
Accounting, 13(5-6), 797-836.
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.
Modarres, A., & Rafiee, A. (2011). Influencing factors on the ethical decision making of Iranian
accountants. Social Responsibility Journal, 7(1), 136-144.

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Pflugrath, G., Martinov-Bennie, N., & Chen, L. (2007). The impact of codes of ethics and experience on
auditor judgments. Managerial Auditing Journal, 22(6), 566-589.
Professional Ethics - AICPA. (2017). Aicpa.org. Retrieved 19 September 2017, from
http://www.aicpa.org/InterestAreas/ProfessionalEthics/Pages/professionalethics.aspx
Roles and Importance of Professional Accountants in Business | IFAC. (2017). Ifac.org. Retrieved 19
September 2017, from https://www.ifac.org/news-events/2013-10/roles-and-importance-
professional-accountants-business
Zucker, L. G. (1986). Production of trust: Institutional sources of economic structure, 1840–
1920. Research in organizational behavior.