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

Running head: Financial Accounting 1
FINANCIAL ACCOUNTING
STUDENT’S NAME
STUDENT NUMBER
COURSE NAME
COURSE NUMBER
DATE OF SUBMISSION
NUMBER OF WORDS

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INTRODUCTION
Accountants are expected to conduct themselves with a high degree of professionalism
and ethical standards which meet the public interest requirement. In this regards codes of ethics
and practice were introduced by regulatory bodies in the accounting and finance business sector.
These business professionals are urged to comply to these codes of ethics during business
transaction for the benefit of stakeholders, shareholders and corporate social responsibility
(Efrat, 2019). Codes of ethics are means used by professionals to assure their clients of their
responsibility and societal obligation. Examples of these codes of ethics on the Australian sector
are Banking Code of Practice and Code of Ethics for Professional Accountant.
The Banking Code of Practice which was published and released by Australian Banking
Association (ABA) is a code of practice which articulates the expected merit of practice and
conduct of staff and managers in banks while dealing with individuals, groups, small business or
guarantors to these businesses. This code which will be effective on 1st July, 2019 is a review and
rewrite of the existing Code of Banking Practice which has been effective since 2013 (Kumar &
Prakash, 2019).
Banks in Australia are to adopt these code voluntarily, these means that this code of
practice is not mandatory to Australian retail banks unless they wish to be members of Australian
Banking Association which makes it mandatory.
Code of Ethics for Professional Accountants is a document by the Accounting
Professional and Ethical Standards Boards (APESB) which dictates the expected ethical behavior
of professionals. It is based on an earlier issue of the same by International Federation of
Accountants (IFAC). APESB is a body developed in 2006 with the intention of providing

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professional and ethical standards for members that belong to CPA Australia and other
accounting bodies that contributed to its formation (Christ, Rao & Burritt, 2019).
This paper is aimed at comparing the two codes of ethic and practice in terms of
similarity and difference, analyze their need and effectiveness based on several peer reviewed
journals, articles and books.
COMPARISON AND EFFECTIVENESS OF BANKING CODE OF PRACTICE AND
CODE OF ETHICS FOR PROFESSIONAL ACCOUNTANTS
Similarities and Differences.
After having a brief introduction of the codes, it is important to look into some of the
similarities and differences that this codes have, this will be done in general subtopics as
discussed below:
People under this codes
The banking code of practice is applicable to banks that have membership under
Australian Bank Association (ABA), this therefore means that it only applies to individuals who
own accounts and use banks that have signed up to the code. On the other hand, code of ethics
for professional accountants is divided into three parts, with the first part applying to all
members, second part to members in public practice and the third part to members in business.
Scope and Application
The banning code of practice is only applicable and operational within the banking
industry in Australia for individuals, small businesses, customers and their guarantors. On the
other hand, code of ethics for professional accountants covers a larger scope applying to other
member’s states who are not in Australia.

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Purpose
The main purpose of banking code of ethics which is to be effective on July 2019 is,
introduction of new measures that will make banking products easier to understand and that the
products are more focused on the customer rather than the banks. The main purpose of the code
of ethics for professional accountants to be effective on 2020 is to enforce professional
competence and confidentiality in the accounting sector focusing on integrity and objectiveness
of auditors and accountants (Maxwell, 2019).
Compliance with the law
Inside the code of ethics for professional accountants, there are code denoted by R
imposing obligation and codes with A which provide explanation on how to apply the framework
and principles of this code. In cases where the existing law or regulation is preventing the
member from applying parts of the code, the laws are to prevail first and the member will abide
by other parts of the code (R100.3). In banking code of practice, banks must always comply to
the codes, in a scenario where the banks have to follow the laws and regulation alongside the
code, the bank will follow the code lest it violate the law (Jacobson, 2019).
Fundamental principles
The guiding principles for banking code of practice are service, transparency,
accountability and trust and confidence. The fundamental principle in code of ethics for
professional accountants are professional competence and due care, integrity, confidentiality,
professional behavior and objectivity.
Both of these codes of ethics regulate the professional behavior of accountants in
Australia and members are required to sign up to the codes. These codes are both under ethical
regulatory bodies which are Australia Banking Association (ABA) and Accounting Professional