Ethics and Code of Conduct in Accounting: Professional Practice Report

This report delves into the critical role of ethics and code of conduct within the accounting profession. It begins by highlighting the significance of business ethics in organizational success, emphasizing its impact on policy development and decision-making. The report then presents a detailed analysis of the Chartered Accountants Australia and New Zealand (CA ANZ), exploring its charter, code of conduct, and disciplinary processes. Furthermore, the report incorporates insights from an interview with a finance manager in the hospitality industry, examining their adherence to professional standards and the impact of ethical guidelines on their daily work. A comparison between the interviewee's practices and the CA ANZ's standards reveals similarities and differences in the application and enforcement of ethical conduct. The report concludes with a personal reflection on the importance of ethical behavior in accounting, reinforcing the need for integrity and adherence to professional standards to maintain trust and ensure long-term success.

Running Head: PROFESSIONAL PRACTICE IN ACCOUNTING 1
Professional Practice in Accounting

PROFESSIONAL PRACTICE IN ACCOUNTING 2
Executive Summary
Business ethics is a key determinant in the long-term success of an organization. It
provides a base of the organizations in developing business programs, policies, and ensuring
effective decision-making. In this respect, the aim of this report is to study the importance of
ethics and code of conduct in the accounting profession.
This report has undertaken a review of Chartered Accountants Australia and New
Zealand (CA ANZ) and conducted an interview with an accounting professional who is
working as a finance manager in a hospitality company in Australia. The findings of the
report reveal that code of conduct and ethics have a great impact on the working of
accounting professionals. The professional body is very strict with the adherence of conduct
by its members and on the breach of any professional standards, disciplinary actions are
taken.

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Table of Contents
Executive Summary...................................................................................................................2
Introduction................................................................................................................................4
Roles and Responsibilities of the Interviewee...........................................................................5
Analysis of the Interview Questions..........................................................................................5
Analysis of the Professional Body: CA ANZ............................................................................6
Similarities and Differences between the Interviewee and Professional Body..........................9
Personal Reflection..................................................................................................................10
Conclusion................................................................................................................................12
References................................................................................................................................13

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Introduction
For every human being, ethics plays an important role in shaping his personality. In
general, it refers to the moral principles which govern the behavior of an individual. In the
context of business, it is defined as the study of business practices and policies which are
related to the controversial issues (Ferrell & Ferrell, 2012). These issues may be in the form
of discrimination, corporate social responsibility, corporate governance, bribery or fiduciary
responsibilities.
It ensures that there is a certain amount of trust present in the participants of the
business market which helps them to carry out the business transactions. In the companies, it
is present in the form of a set of principles which help the managers in forming the policies,
programs for the business and provides a base for the decision-making process.
It is important for a business to ensure ethical practices in its activities as it has the
capability to affect the productivity, reputation and the bottom line of any organization
(Mika, 2012). Ethics in the organization helps in building a positive corporate culture which
helps in boosting the morale of the employees, which eventually results in better productivity.
In this regard, this report aims at discussing the role of ethics and code of conduct in
the working of an accounting professional. An interview has been conducted with a finance
manager working in a hospitality organization base in Australia. The manager is an
accounting professional, a CA qualified professional, who is responsible for partnering with
the senior management of the company on a regular basis and indulge in the decision-making
process.
In addition to this, this report also undertakes a review of a professional body
Chartered Accountants Australia and New Zealand (CA ANZ), wherein the charter, current
code of conduct, ramifications of breach of conduct and the education provided by the
professional body are discussed. It also makes a comparison between the interviewee and the

PROFESSIONAL PRACTICE IN ACCOUNTING 5
professional body in terms of similarities and dissimilarities that are faced concerning the
code of conduct.
Roles and Responsibilities of the Interviewee
The role and responsibilities of the finance manager are listed below:
 Creating budgets and forecasting for the company
 Responsible for monthly accounting responsibilities including cash flows, profit,
and loss, reports
 Business analysis and providing guidance for improvements in company’s
financials
 Assist the senior management in strategy setting
 Ensuring best accounting and analytical practices are enforced in the company
 Audit control and process improvement
 Liaising with the internal and external stakeholders
Analysis of the Interview Questions
An interview was conducted with the finance manager of a hospitality company based
in Australia to determine the relevance of code of conduct on the professional life of an
individual. The analysis of the interview reveals that as an accounting professional, the
interviewee was aware of the professional code of conduct that is specified by the
professional body as well as the organization where he is working.
When asked about the manner in which he became aware of the professional
standards, it was revealed that in the case of the professional body, the regular amendments
made by the body on their websites and the members’ book aware him of the desired
conduct. However, in the case of the organization, it is a onetime affair where the instructions
are given at the time of orientation.

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The analysis of the interview indicated that the code of conduct laid by the
professional body has a great impact on the working of him. This is because that the
professional body is very strict with the adherence of code of conduct. The interviewee did
not want to get complained due to the breach of any professional standards as it may lead to
the suspension or even cancellation of his certificate of practice.
In the context of the code of conduct laid by the organization, the level of adherence
is comparatively low. This is due to the fact that the company's attitude towards the
professional code of conduct is not that serious. It expects its employees to be professional
but at the same time allows ample amount of time for socialization. working has caused
informal relationships among the co-workers; however, while dealing with the clients, the
employees ensure that they adhere to the official code of conduct as they are representatives
of the company.
In case of breach of any standards, the interviewee revealed that the person is given a
warning twice on the breach of any standard, and even after the warning the same behavior is
observed, the management penalizes the person with heavy fines. When asked about the
actions that the interviewee would take in case of any unethical behavior, the interviewee
responded that he would remind the person of the professional conduct and if the behavior is
likely to have significant consequences, he would bring it to the notice of management.
Analysis of the Professional Body: CA ANZ
The professional body selected for this assignment is CA ANZ which stands for
Chartered Accountants Australia and New Zealand. The professional body, CA ANZ was
formed in the year 2013 after the amalgamation of the New Zealand Institute of Chartered
Accountants and the Institute of Chartered Accountants Australia (ICAA).

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The title of chartered accountants is one of the internationally recognized professions
which reflect a profession with highest professional and ethical standards and professional
expertise (Australian Accountants Directory, 2017). The board governs the working of
chartered accountants working in both Australia and New Zealand and has approximately
100,000 members who are financially astute.
In order to become a member of CA ANZ, a person has to train for a time duration of
minimum six years. The charter of this professional board is to empower its members in
becoming the shapers and leaders of business and finance in both New Zealand and Australia
or at any place in the world where they work (CA ANZ, 2017).
The code of conduct for the members of CA ANZ in Australia is set by the
Accounting Professional and Ethical Standards Board (APESB). The code of conduct,
professional and ethical standards set by the board are expected to be followed by the
members of CA ANZ, IPA, and CPA (CA ANZ, 20171).
The CA ANZ communicates its professional standards and code of conduct through
the members’ handbook which contains all the necessary acts that are to be followed by its
members. The current code of conduct provided by the board can be categorized under the
following headings:
 Support of consumers, society, employees and self-regulation- it includes code like
communicating as per the laws or international treaties framed by the government,
recognizing that consumers can rely on the member agencies for not only working
within the law but also in ethical norms which are accepted, to pay fair
compensation to the interns and students for the work done and demonstrate
environmental responsibility and sensitivity in the work done by the CA ANZ
community.

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 Support of the work done by CA ANZ- it is expected that each member of the board
is supportive of the work done by Association in ways, such as attending the award
events, annual meetings, agreeing to fulfil the responsibilities on the election or
invitation of Executive board and supplying volunteers for working on different
committees (Communication Agencies Association, 2012).
 Public criticism of the sector- the members are expected for not giving any public
statement that is unfair and harmful to the industry.
 Relationships with clients- to ensure confidentiality of clients, to not bargain any
compensation on behalf of the client without his knowledge, to not develop any
business relations with a third party which may create conflict with the interests of
the clients.
 Relationships with suppliers and media- to conduct due diligence in order to ensure
that the member agency does not become obligated to media or suppliers, to not
obtain any confidential information from suppliers or media about the advertising
plans of any other companies (Communication Agencies Association, 2012).
The board takes its code of conduct and ethical standards very seriously. In case of
breach of any ethical code or a complaint against a member, the board makes an investigation
and takes disciplinary action, if required. Any complaints of breach of the code of ethics are
handled by the Disciplinary Tribunal, the Professional Conduct Committee, and the Appeals
Tribunal.
The Professional Conduct Committee (PCC) investigates and decides if the
complaints are legitimate and are to be forwarded to the Disciplinary Tribunal. It can levy
fines, issue sanctions against the member and take publicity decisions (CA ANZ, 20172). The
PCC can opt for the following courses of action against the member:
 Decide that there is no further action to be taken against the member

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 Caution the member
 Require the member to submit dispute fees
 Impose several penalties in the form of agreement with the member
 Order the member to pay for the costs incurred by the complainant.
However, if the member is found guilty in the proceedings of the Disciplinary
Tribunal, the outcomes of the breach can be in the following forms:
 Removal of name from the register of members
 Suspending the member for a period of maximum five years
 Suspending or canceling the member's certificate of practice
 Penalizing the member with a maximum sum of $20,000
 Ordering to return the entire fees to the complainant
 Censuring the member officially (CA ANZ, 2016)
The board believes that it is necessary for its members to stay updated on the recent
financial events and other topics which are required for effective and better working of its
members. In order to further develop the intellect of its members, the board conducts
conferences, regional events, seminars, provide learning opportunities and even provide
tailored learning to its members. The topics covered in the learning opportunities include
reporting, audit and assurance, ethics and integrity, financial advisory, superannuation, tax,
corporate finance and people and leadership (CA ANZ, 2017).
Similarities and Differences between the Interviewee and Professional Body
From the comparison of the interviewee's responses and the review of a professional
body, it is observed that the role of a code of conduct in both the cases is important. People
take adherence to the professional standards seriously and ensure that the same is reflected in
their work. On the breach of any professional standards, the outcome in both the cases is
penalizing the person with heavy fines and cancellation of the certificate of practice.

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However, in the case of the professional body, the outcomes depend upon the severity
of the breach. The difference also lies in the impact that the codes have on the individual who
is following them. In case of organizations, it is not reflected in an individual’s work as the
organizations are not that strict when it comes to interpersonal relations in the co-workers
which is not the case in a professional body.
Personal Reflection
In my opinion, the values and ethics that a person inherits guide him in taking the
decisions. If an individual takes a decision which is against his values and ethics, the
consequences of such decisions are likely to have an adverse impact on the person's career.
Similarly, the ethical behavior demonstrated by the peers or the employers is likely to have an
impact on individual's career.
Staying honest with the personal values can provide a lot of benefits to one’s career
and reputation. It is believed that the values are responsible for guiding a person whereas the
ethics are responsible for keeping the person grounded (Fisher, 2016). Values help a person
in guiding his sense of determining as to what is important. A person inherits various values
throughout his life; some holds greater importance than others.
Ranking of these values in the psyche of a person affects the choices he makes in his
career. For example, if security factor holds a greater significance for a person in comparison
to the achievement factor, it is likely that the person becomes more risk averse. The person
would prefer keeping the same job rather than dropping it for a risky and profitable
opportunity.
In terms of ethics and the code of conduct, an individual learns the personal ethics
from his past experiences, upbringing, and relationships, whereas he learns professional
ethics from education and the organization where he works (Fisher, 2016). Following the laid

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out code of conduct and being ethical would build trust in a person, and there is a possibility
that people are attracted for getting support, ideas, and cooperation. It can even help the
person in getting leadership opportunities as people trust him due to his professional behavior
and values.
In order to ensure that I act professionally and ethically in the workplace, I would
make sure that I am always honorable and present myself with integrity. While working in an
organization, I would be passed with a lot of confidential information, both from my
colleagues and the organization; I would ensure that I keep that information to myself only as
I believe that it is very significant to be honest to such confidences (Weiler & Schoonover,
2001).
I would have to be respectful and courteous throughout my career span as it would
help in making the social interactions smooth and would help me in earning respect and
avoiding unnecessary conflicts. I would also ensure that I remain honest and transparent in
my work as it is a facet of my moral character and indicates positive attributes of my
personality, such as loyalty, truthfulness, sincerity, fairness and other attributes (McAuliffe,
2014). Moreover, it would help in building trust and increase my personal value in front of
all.
It would also be necessary to work on the time management skills as being punctual
would help me not only with completing my scheduled tasks but also in socializing. Another
aspect that would ensure professionalism is concern about employee safety. I believe that it is
the duty of every employee to report any suspicious person or misconduct seen in the
organization (Root III, 2017). Reporting such misconduct would ensure that I am doing my
part for maintaining the ethical conduct in the office and keeping other employees safe.

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Conclusion
The ethics and code of conduct play a significant role in the professional life of an
individual. It is reflected in the form of work behavior and the decisions taken by an
individual. It has been concluded that the organizations are comparatively less serious about
ethical conduct between its employees.
CA ANZ has its own set of code of conduct that it communicates to its members in
form of members’ book. In case of breach of conduct, the consequences in both the cases
include penalties and fines. However, in case of CA ANZ, the consequences are more severe
and depend upon the nature of the breach.