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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The safeguard will help the professional accountants to increase their deterring unethical
behaviors in their profession. The safeguards are created by the highly knowledgeable
accounting legislation and regulations so that the people can employ their jobs accordingly.
 A well planned and well-publicized complaint about the organization, employees,
colleagues, and members can also help the accountants to draw their attention in their
unethical or in their unprofessional behaviors.
 The explicitly stated duties can also breach the ethical requirements of professional
accountants.
 The accountants must determine their case and facts crucially before they act on any
terms and conditions (Hugos 2018).
 The accountants must identify their ethical issues with stakeholders and how will it affect
their decisions in the company as well as in self-interest.
 The accountants must remember their obligations to the stakeholder and the expectations
that they have on accountants. The accountants must reflect their professional code in
their business.
 The accountants must not give a report of fail transactions for a company that may lead to
trouble in the long run, as the altered financial record will ultimately lead to the downfall
of the company.
The safeguards can be applied in the profession of accountants according to the different
circumstances. The professional accountants must know what has to be considered with all the
relevant information, also by including the significance of their issues and threats which can
conclude to be unacceptable too (Fayol 2016).
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For a professional accountant, in their work environment, the safeguards may vary all according
to the different circumstances. The work environment safeguard is also necessary as the
professional have to compromise with their work life. In public practice, the accountants have to
determine on the deals that are related to the significant threat. The professional accountants in
the public practice must also consider the reasonable effects and the knowledge they have on
their profession.
The knowledge may also include on the safeguards applied according to the treats and the
reasonable conclusions of it to be acceptable. The considerations on safeguards may also vary
according to the structure of the firm, nature of the work and the significance of the threat.
Conceptual Framework Approach
There are many circumstances in which the professional accountants work and in some cases, it
may also give rise to a specific threat with the fundamental principles. However, an accountant's
profession, it is not possible to define each and every situation that incorporates threats. Addition
to this, there is much nature of engagements in which an accountant works and consequently, it
enables the threats and risks.
In such cases, a conceptual framework approach will help an accountant to evaluate, identify
and to address the threats that are compliance with the fundamental principles and set of rules
too. The code also provides a framework where the professional accountants could evaluate,
identify and respond to the threats according to the fundamental principles. If the threats are
insignificant, in such cases the accountants should apply an appropriate safeguard approach so
that the treats can be reduced in an acceptable level (Altieri and Nicholls 2018).
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An accountant should also evaluate the threats to compliance according to the fundamental rights
so that they could know what should be expected and how the circumstances can be resolved. An
accountant should also take qualitative and quantitative factors into their account while
considering the effects and significance of threats. The professional count must also implement
an appropriate safeguard approach by discontinuing the services that involve threats and should
decline the necessary offers from the client or any business organization (Powell 2018).
The professional accounts may also violate the provisions of the ethical code and their ethical
behaviors. The in adherent violation may affect the significance and nature of the threat which
should not be comprised with the fundamental principles of the profession. The threats must be
discovered in the profession and promptly the safeguards should be applied by keeping the
fundamental principles in mind (Greenberg 2017).
PART B: The role of professional accountants in sustainable development
The professional accountants for sustainable development have widely debated with the
environment accounting that can be an extension of corporate responsibilities which they hold.
The sustainable development related to the professional accountant's emphases their role in
providing sustainable development to the business and society. The researchers have explored
the role of accountants in context to bring in new climate change and new carbon economy and
their skills and knowledge have given an implication to the accounting profession and also to the
development of the national and an environmental accounting.
The accountant's professions are also considered to be one of the important aspects in achieving
the sustainable development goals for a business and as well as for the society. The professional
accountant’s knowledge and skills has also brought a change in whole planet by contributing the
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objectives to giving quality education, economic growth, decent work, innovation in industry and
infrastructure, production and consumption level, justice, peace and strong objectives for
institutions and objectives for the climate actions (Laudon and Laudon 2016)
In the context of the research, it is also seen that the accounting profession has added many
objectives to bring in sustainable development in the world and also in the business environment.
The major role of accountants is to meet the interest of their clients. Public and business by the
economic factors and other responsibilities of Employees, shareholders, suppliers, banks, state,
associates, customers, investors, banks and etc.
Sustainability
The accountant also plays a vital role n protecting the interest of its user in maintaining their
financial pieces of information and the financial statements that co-relates to bringing in
sustainable development. However, it is also necessary that the accountant’s profession should
be taken seriously in the business organization as they play a vital role in the position of actively
participating in the decision making, operation aspects and during the implementing of strategies
(Morgeson, Brannick and Levine2019)
In the organizational context, if the companies want to develop a sustainable environment they
should determine the accountancy profession as the first requirements as they can help in
supporting the companies by creating the new values over time and by giving solutions during
the uneven circumstances. The accountants can also help in improving the organization's
decision making by identifying the business opportunities for them and also by delivering their
knowledge and skills to innovate the services and products.
The accountant professions play a role in levering the sustainable development of business in
high as well as for the whole world by giving them proper solutions with their skills and
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knowledge. The professional accountants also have that values, information, mechanism, and
report which is needed for an organization to drive its sustainability. The professional
accountants are also involved in meeting the goals of the organization by proving them
sustainable development that supports their financial stability and development too (Noe et al.
2017).
Issues and solutions for sustainability
1. Lack of experience, knowledge, and skills
A wide range of professional accounts needs skills so that they can provide a foundation for the
organization. However, the reports have stated that there are professionals who lack in their
training and lack the shorting of accountant personnel where they need to analyses and gather up
the related information on sustainability for the benefits of the organization (Bush et al. 2019).
Solution: As substantially is one of the keys to deriving business in profit the accountants must
educate themselves o how they can derive analyses on the data. The training and measuring the
suitable development within the employees is also important to have enough knowledge,
education, experience and training so that they can act according to the obstacle which is needed
to perceive in the sustainability accounting in the business and in the public sector (Kanki2019).
2. The high cost of accounting system
Another major key issue which is being faced by the professional accountants to build a
sustainable system in the organization is the high cost of the accounting system. As the reports
have stated that the cost implication and resources used in accounting is too expensive and the
technical and financial support an organization needs also become of the hurdles to bring up a
sustainable development the business.
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Solutions: The organizations can cut their time and expenses with a mentoring approach. The
accountants can use the cost feasible approach to maintain the expenses of their organization so
that they can act to lower up their accounting systems (Ansoff et al. 2018)
These are the two most global challenges that are being faced by the organization and by the
accounting professional that reflects the progress of an organization. With the declination of the
challenges the organizations can embrace their performance on the below listed thee levels:
 Economic:
The financial performance of an organization reflects the direct impact on the economy,
growth, job creation, profitability and also leads to the benefits and compensation for the
accountant professions.
 Social:
This reflects the impact of organizations sustainability on the social issues, people that
may also include the skills, health, and motivation to the people. The social sustainability
of an organization can also help the business to grow its ethics and conducts within its
employees and accountant professionals.
 Environmental:
The sustainability of an organization can also include environmental sustainability by
relation to the natural resources that can be consumed in delivering the services or
products (Muller 2019).
In point of organizations perspective, by achieving the sustainability for the investors means that
the organization is doing more than just complying with the regulations and riles. However, for
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the organizations taking a sustainability path requires them to have relations with their social,
economic and environmental factors to so that the challenges could be addressed and the
accountants can give their best in respective of organization and world growth (Kanki, Ancaand
Chidester2019)
Conclusion
The professional accountants must have the right code on conduct to give their best in the
organizations. The fundamental principles should be applied in their professional behavior as
discussed above in PART A. The professional accountants are directly related to creating a
sustainable development at the corporate level, in organizations, in economic growth,
development of people and to bring a change in the world. The must know their duties and all the
essential criteria such as o decision making, tactical, strategy, and operation approach in the
business. As discussed in Part B, The professional accountants also play a major role in creating
sustainable development according to bringing in new economic conditions and sustainability in
the business.
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