MA612 Ethics | Master of Professional Accounting

Added on - Oct 2019

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ETHICSAccounting Profession & APES 110STUDENT ID:[Pick the date]
ETHICSThe requirement of Ethics is perhaps universal but one profession where ethical conduct isperhaps more critical than the others is the accounting profession considering the role thatuser trust plays in continued relevance of this profession (Arens et. al., 2013). Unethicalconduct on the part of the accounting professions can violate the trust of the investors andother users such as lenders and creditors and thus reduce the need for reporting and alsoauditing. As a result, for accounting professionals various codes of conduct have beenestablished which highlight the model qualities they need to display in their conduct(Cheffers & Pakaluk, 2007). One of the most prominent ones in Australian context is APES110 which has been released by APESB (Accounting Professional and Ethical StandardsBoard). In view of the above background, the objective is to highlight how APES 110promotes ethical conduct and thus greater trust from the public which is consideredimperative for the profession especially in the present challenging environment.It is evident that trust essentially is linked to ethical behaviour on the part of accountants. Asa result, the crucial question arises as to the meaning of ethical conduct in the accountingfield. One of the theories of ethics named as virtue ethics provides hint in this regards byhighlighting key desirable virtues for accountants as courage, wisdom, justice and mastery.The justice in the accounting profession implies that the accountant would use the availableknowledge and skills to ensure that a fair representation of the financial statements must bebrought forward (Cheffers & Pakaluk, 2007). This is supported by the APES 110 through theinsertion of section 120 which tend to deal with objectivity. The section on objectivityrequires the accounting professional to be objective with regards to the professionaljudgement application which would involve questioning the key assumptions made by theclient and verify the accuracy of the same. Also, this demands that irrespective of thesituation, there should not be any impairment in this objective. The situations whichcompromise these have also been highlighted which involve conflict of interest or in thepresence of undue influence (APESB, 2010).Further, courage essentially refers to the use of available skillsets in a manner that tends toserve the informational needs of the external users. This would involve detection of anyfrauds and also ensuring that there are no mistakes when the accounting or audit work istaking place (Cheffers & Pakaluk, 2007).. This is highlighted in section 130 of the APES 110code which tends to deal with professional competence and due care. As per this objective, itis necessary that the professionals must regularly update their knowledge and skillsets so thatthe information needs of the client are met (APESB, 2010). Possession of skills and regular
ETHICSupdating has special significance for the accounting field considering that the accountingstandards are inherently dynamic and also the type of instruments used by companies forfinancing are also undergoing rapid change and increasing complexity which poses achallenge for the professionals (Caanz, 2016). However, with requisite and updated technicalknowledge coupled with due care, the accountants can ensure that the informational needs ofthe users are satisfied in a reliable manner (Gay & Simnett, 2012).The next desirable virtue is wisdom which essentially relates to not only available skills butapplying them with due care and professionalism (Cheffers & Pakaluk, 2007). This iscaptured by the APES 110 in the form of section 150 which deals with professionalbehaviour. Hence, it is imperative that the accounting professional must adhere to the variouslaws and obligations while conducting their work and should not do anything that woulddiscredit the profession (APESB, 2010). Thus, when the accounting professionals make aparticular representation to the client, they should be wise enough so view the implications oftheir actions over the long term which could be potentially disastrous. The last of thedesirable virtues which is especially relevant in the current times is self –mastery. This isbecause offlate there have been numerous high profile bankruptcy cases where thecontribution of the auditor to the bankruptcy was found to be significant (Cheffers &Pakaluk, 2007) . It is essential that the independence of the accounting professional should bemaintained so that no quid pro quo relation is established with the management (Leung,Coram & Cooper, 2012). This is ensured through insertion of section 110 which deals withintegrity and is considered the biggest contributor to public trust. The section 110 puts theobligation on the accountants and auditors to be honest in their professional dealings andshould not be a part of any initiative which can potentially misguide or mislead the intendedusers. Hence, this section highlights the emphasis of honest conduct for the accountant’sconduct (APESB, 2010).The use of APES 110 is relevant from the perspective of increasing trust as it highlights thevarious threats to independence and also suggests the various mechanisms to ensure thatthese threats are addressed in the requisite manner. This is essential considering that the trustof people on accountants is dwindling and the primary reason for the same is compromisedindependence (Arens et. al., 2013).. However, the APES 110 highlights the various situationsin which independence may be compromised knowingly or unknowingly. For instance, theaccepting gift from client which the client may try to justify as a goodwill gesture is notpermitted under this standard (Cheffers & Pakaluk, 2007). This is quite useful as the APES
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