Professional Accountant's Ethical Role and Sustainable Development

This report examines the ethical responsibilities of professional accountants, focusing on fundamental principles like integrity, objectivity, confidentiality, professional competence, and professional behavior. It identifies three key ethical dilemmas: conflicts of interest, self-interest, and pressure from management, detailing their effects on ethical principles and affected parties. The report also discusses threats to compliance, including self-interest, self-review, advocacy, familiarity, and intimidation, along with corresponding safeguards and the conceptual framework approach for resolving ethical dilemmas. Furthermore, it explores the role of professional accountants in sustainable development, addressing issues like lack of experience, knowledge, and skills, as well as the high costs associated with implementing sustainable accounting systems, covering economic, social, and environmental aspects.

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Table of contents
Introduction......................................................................................................................................4
PART A: The ethical role of a professional accountant..................................................................4
Fundamental Principles of an ethical code......................................................................................5
Integrity:.......................................................................................................................................5
Objective:.....................................................................................................................................5
Confidentiality:............................................................................................................................5
Professional Competence:............................................................................................................6
Professional behavior:..................................................................................................................6
The three ethical dilemmas..............................................................................................................6
1. Conflicts of interest...........................................................................................................6
Effects to fundamental principal:.................................................................................................7
2. Self - Interest.....................................................................................................................7
Effects to fundamental principles:...............................................................................................7
3. Pressure from Management..............................................................................................7
Effects to fundamental principal:.................................................................................................8
Identified relevant facts on ethical dilemma....................................................................................8
Unethical effects..........................................................................................................................8
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Affected parties............................................................................................................................8
Affected reputation of professional accountants..........................................................................8
The solutions and safeguard to ethical dilemmas............................................................................9
Threats to compliance......................................................................................................................9
Self-interest:.................................................................................................................................9
Self-review:................................................................................................................................10
Advocacy:..................................................................................................................................10
Familiarity:.................................................................................................................................10
Intimidation:...............................................................................................................................11
Safeguards..................................................................................................................................11
Conceptual Framework Approach.................................................................................................13
PART B: The role of professional accountants in sustainable development.................................14
Sustainability.................................................................................................................................15
Issues and solutions for sustainability...........................................................................................16
1. Lack of experience, knowledge, and skills............................................................................16
2. The high cost of accounting system.......................................................................................16
 Economic:.......................................................................................................................17
 Social:..............................................................................................................................17
 Environmental:................................................................................................................17
Conclusion.....................................................................................................................................18
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References......................................................................................................................................18
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Introduction
The accountancy profession is a responsibility of action to satisfy an employer or the individual.
A professional accountant must comply with their working with ethical behavior that involves
some fundamental principles and professional ethics that can be applied to the conceptual
framework. In accountancy, the conceptual framework helps the accountants to get guidance on
the ethical principles. The conceptual framework also helps in identifying the threats to
compliance to address the threats and ethical dilemmas.
In part A of this assignment, the ethical dilemmas and how the conceptual frameworks can be
applied to solve the ethical dilemmas of accountants will be discussed. In Part B of this
assignment, the accountant’s sustainability and the significance of organizational sustainability
will be involved also with the measurements of challenges and issues being faced to manage the
sustainability of organizations.
PART A: The ethical role of a professional accountant
A professional accountant's responsibility is to behave in the most ethical and professional
behavior all the time. The role of a professional accountant is also to promote, create and
maintain an ethical culture within the organization they are working or along with the clients,
there are practicing. An accountant also has a great deal of responsibility and the role that may
subject to the scrutiny of their local community. In particular, the business and clients expect a
high level of services from their accountant, so the accountants must have that ethical behavior
that shows their integrity to be unquestionable (Berman et al. 2019).
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Professional accountants also have a responsibility to give the best services to their clients. The
ethical codes help to fulfill their responsibility by addressing the circumstances that may arise
which not be compromised. Accountants should also know their ethics to work in the best
interest of their clients. However, they are also responsible to act on their public interest that
requires an objective that needs to be exercised every time. The accountants also face many
ethical dilemmas during their duties that cannot be reconciled quite easily. The three major
ethical dilemmas that accountants face are given below(Hislop, Bosua and Helms 2018)
Fundamental Principles of an ethical code
The professional accounts are required to follow the below fundamental principals
Integrity:
The professional accountants must be honest and straightforward in their decision by
giving an honest review of the company and also in all other professional relationships
(Goodland2019).
Objective:
The professional accountants must not be biased, or should not be influenced by others
according to their business judgments and override professional behavior.
Confidentiality:
The professional accountants must have an ethical code of conduct that is to respect the
information and confidentiality of a business or any other professional relationship they
are dealing with. The accountants must not disclose any information to the third party
without any specific authority unless if they have any professional or legal authority to
disclose it. The confidential information in business and the professional relationship
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should not be used by the accountants as a personal advantage to gain other illegal profits
with the involvement of the third party (Kerzner 2019).
Professional Competence:
The professional accountant must know their duty on how they should maintain their
skills and knowledge at a level to ensure that the employer is getting a competent
professional service from accountants. The professional accountants must know their
ethical code of conduct that can be diligently worked in accordance with their
professional and technical standards to provide a professional service (SA and Rica2016).
Professional behavior:
The accountants must know their regulations and laws so to avoid the discredits and
unethical behavior in their profession.
The three ethical dilemmas
1. Conflicts of interest
The major ethical dilemma that accountancies face revolves with the conflicts of interest that are
as:
 The need to retain the clients manipulated financial stated or to give them an unqualified
audit report.
 The need for security and independence that are needed to sure the assignment and
business by the auditor (Kaplan and Atkinson 2015). The need to retain the pressure from
employees and management so that fraudulent transactions can are recorded which has
manipulated statements.
 Frauds perpetrated by the business member, friend or by the relative.
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Effects to fundamental principal:
The conflict of interest affects the professional competence that is the fundamental
principal that a professional accountant must have it their respective job role. The conflict
of interest affects the manipulation of work and leads to fraud activity that typically
affects the professionalism of the accountants.
2. Self - Interest
 Self-interest is an ethical dilemma where the accountant has the interest to do a fraudulent
transaction or activity.
 The self-interest with fraudulent activity can also get the accountant with huge promotion
offers or bonus if the respective business is doing well.
Effects to fundamental principles:
The fundamental principles of self interest ethical dilemma address to the conduct and
professional behavior of the accountants. This ethical dilemma affects on professional
behavior my showing the misconduct and lack of sincerity the accountants have in the job
role.
3. Pressure from Management
 A business always want to see a healthy balance sheet that has good cash flow and high
include reports in such cases the accountants come across in an ethical dilemma where he
might have a false number to the company's success(Stemple, Roy and Klaben2018)
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 The unethical accountants could also alter the company financial number with a false
picture that will give the business a row on doing false business.
Effects to fundamental principal:
From the pressure of management the integrity fundamental principal gets affects as the
accountant professional according to the fundamental principal of integrity he/she should be
honest on their work and they should not give a misleading report for the organization.
Identified relevant facts on ethical dilemma
The ethical dilemma that may arrive in accountant profession can affect the stakeholder, director
and investor of the company and also the reputation of the accountants. In some cases, the
accountants may overpay their accounts to the third part. Even though, there are many benefits
an employer has and is totally responsible for the suspicions activity if any arise
Unethical effects
 Misleading confidential and important terms of the organization to third part.
 Misleading the information’s across the company.
 Giving out account and transaction information’s
Affected parties
The affected parties may conclude to the sales director, investors and stakeholders, tax authority
and even board members as the mislead of information in an organization can event the total
working of the company as well as it can lead to success and failures too.
Affected reputation of professional accountants
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The reputation of accountants can be affected in the company as they might lose their job and
position in the public market. The professional accountants must know their ethics and duties
which is responsibility of them to carry out in their professional career.
The solutions and safeguard to ethical dilemmas
In the case study, the ethical codes for the accountants are illustrated to resolve the ethical
dilemmas of them. The approach focuses on safeguarding the principles of:
 Objectivity
 Integrity
 Professional behavior
 Professional competence
 Confidentiality
In order to solve the ethical dilemmas, it is very important for the accountants to be altered
during the circumstances where they might get threatened with these fundamental principles. The
threats can be managed and evaluated by reducing their acceptable levels.
Threats to compliance
The threats that may arise during the profession of accountants are as follows:
Self-interest:
The financial threats can lead to fraud activity that inappropriately will influence the accountant's
behavior. The self interest threat is co-related to affecting the fundamental principal of
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accountant’s professional behavior. The threat of fraud activity typically shows how the
accountant is sincere and trustworthy towards an organization as well as for their work.
Self-review:
The threat may incorporate the evaluation that results in judgments that are not performed
accurately or it can be performed by someone else (Christopher 2016). The self review threat is
compliance to the fundamental principal of objectivity. The fundamental principle states that the
accountant should be objective on their work and should not be biased; the self review is one the
threat that may hinder the objectivity.
Advocacy:
The threats that an accountant may promote for his position is a point where the objective of the
company is compromised. The advocacy threat is compiled to the fundamental principal of
confidentiality, where the accountant must be aware of the rules that organization holds and must
make sure that the legal issues does not arrive due to the disclosures of confidential
information’s.
Familiarity:
This threat revolves with the relationship’s accountants have but with the client or with a person
accountant know from a long time and further they might get too sympathetic to accept their
every word.
The familiarity threat is co-related to the fundamental principal of integrity as it states that the
accountant should maintain their relationship with its clients and customer by delivering them
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the best service. In cases, the familiarly threat could be a major concern where it may affect the
working of an accountant.
Intimidation:
This threat usually revolves due to the deterred activity or due to the perceived pressures that
may include the major influence on accountants (Clark 2018). The intimidation threat is
correlated to the fundamental principle of professional competence as the accountants must know
their duty and must perform their work accurately even in times of deterred activity.
Safeguards
The safeguards for the ethical dilemmas will help to reduce and eliminate the threats that can be
leveled into the two categories that are:
 Safeguard created in the work environment
 Safeguard created in the legislation, profession and in the regulation of the respective
firms (Rumble 2019).
The safeguards that are created by the rules of profession and regulation are not rested to the
following things:
 The experience, education, and training required to enter the profession of accountants.
 Corporate governance regulations
 Continuing the professional standards
 Providing professional development
 Disciplinary procedures and professional monitoring
 External reviews by the third party to give the feedbacks, and the information needs to be
produced by being a professional accountant.
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