Comparison of Banking Code of Practice and Code of Ethics for Professional Accountants

Comparison of two codes
Banking code of Practice.
According to Australian Bankers Association (2014) the banking code of practice in Australia
came into effect in the same time as the reference terms for the Financial System Inquiry (FSI). It
forms the banking industry charter for the customer on the finest practicing standards for the
banking industry.
According to the Customer Owned Banking Association, (2014), the major incarnation of the
code of banking practice in Australia represented the biggest advances on the protection of the
consumers available in a time in hand with the result that the consumers who have been able to
subscribe to the code of banking are afforded a greater protection compared to the customers of
the financial institution who are only required and expected to conform to the legislation. Thus,
the enacting of the code of banking practice was to impact the growth of protection of the
consumer standards in the banking industry.
Need for Codes to be created.
According to Customer owned Banking Association (2014) the codes were created to ensure that
customers were protected. Foremost, the code of banking practice offers customer the privileges
in ranges that have not been fully covered by the Australian legislation, this includes areas that
the legislation might not be suited or offer a suitable response to an existing problem that has
been identified. This is inclusive of the rights in relation to combining accounts, combining the
self-determining rights in relation to compliance with other procedures and contracts, precise
measures for susceptible sets of people, in hand with the imposition of standards that meet the
aspirational banking standards. Secondly, the code of banking practice offers to cover some
products and clients whom are not accorded the cover in the legislative that is relevant. Mainly
because it is very vital for start up businesses, clients, as the safeties in the National Consumer
Credit Protection Act 2009 (NCCPA,2009) do not extend to businesses that are small and start
up credits. Thirdly, the code of banking practice intends to offer a frame to the obligations that
are general and are included in the legislation. Routine for protection can be accorded to the third
parties. Fourthly, the code of banking practices principles has an influence on the legislation
standards and the vice versa which is mostly common known as a “regulatory dance”. Finally,
the code of banking practice has an impact on the levied standards and the expectations of
members in the financial service industry, this is done through a dance called the Regulatory
dance which is between the codes of industry and with a reference to the best practices in the
industry.
Code of ethics for professional accounting.
Monetary organizations particularly like banks are additionally controlled than any other
institution worldwide because of the intermediation role that they play in the industry. As an
intermediary, banking firms normally tend to mobilize funds from excessive expenditure items
on a cost for issuing credit to the deficit units at a given price.

Commercial Banks offers a mechanism of payments that is very effectual to the economy, it
enables one to be able to settle transactions that happen in the daily business activities, individual
transactions and any worldwide customer need. Nevertheless, commercial bank needs to operate
under given rules and regulations that are fully defined by law, public policies and practices, or
any other given conventions.
According to Sanusi (2010) the professionalism and ethics codes in the banking industry today
serves as the basis upon which banking institution make their decisions that is wholly based on
trustworthiness, confidence, honesty and integrity. This formalized code of ethics issues banks
with a thoughtful and shares knowhow of the expectation that includes certain tasks and
behaviors.
The ethics code replicates the ideal required standard and finds a genuine code of conduct that
will apply to every person in the banking institution starting at the top level of managers to the
low level of employees in a firm. The repute of a banking institution together with activities tend
to reflect the professionalism and code of ethics that disturbs its feasible profitability and
development. At every level of the bank the staff are required to be cognizant of the firms
policies vis-à-vis the ethical conduct to be able to make absolutely correct decisions in a tough
business situation and also be able to know the appropriate time to sought out for help whenever
they are faced with ethical dilemmas and to be in a position to report the unethical conduct.
According to Ali Yidawi (2005) Enough legislature has been passed to control various
operations in the banking and ensure an atmosphere that is free, viable and fair. Nonetheless
procedures and penalties alone are not satisfactory to ensure operational disciplines. Thus, ethical
values that are high are normally required to give guidance to the various processes in the
banking industry.
According to Carse (1999), despite the fact of being mindful of the principles of profitability and
productivity, banking institution are required by law to follow certain ethical principles of
banking profession and firm’s ethics. Majority of the banks fail to exercise this discipline, thus
making the banking business to be more complex and thinning the gap between legitimacy and
illegitimacy become more unclear hereby encouraging unethical behaviors.
Codes of ethics adopted by firms or any financial institution for example a bank must be able to
set principles that are generally about the beliefs of the company in issues of mission, how
private, quality assurance amongst others. The issue of ethics that is involved in this context is
concerned with the principles, values which ought to be rooted to either guide behavior of
bankers implicitly or explicitly. (Aron, 2006).
Comparison of banking code of practice and code of ethics for professional accountants
Currently, professional conducts and ethics form one of the very vital play factors in accounting,
thus ensures that there is trust on the global scale of reporting financial and proper practices in
businesses. Ethical codes roles are developed by professional accounting bodies that were
investigated by some studies. (e.g., Douglas & Otto, 2002).