APES 110 Code of Ethics Essay

This essay thoroughly examines APES 110, the Code of Ethics for Professional Accountants in Australia, established by the Accounting Professional and Ethical Standards Board (APESB). It details the five fundamental principles: integrity, objectivity, professional competence, confidentiality, and professional behavior. The essay discusses how these principles aim to protect public interest by mitigating threats such as self-interest, self-review, advocacy, familiarity, and other intermediate threats. Specific paragraphs within APES 110 are referenced to illustrate the code's practical application in preventing fraud and maintaining trust. The essay differentiates between the application of these principles for members in public practice and those in business, providing examples from various sections of the code (e.g., Sections 230, 240, 290, 291, 330, and 350). It concludes that APES 110 is crucial for maintaining ethical standards within the accounting profession, fostering trust, and contributing to the overall development of the financial market.

Running head: ETHICS
Ethics
Name of the student
Name of the university
Author note

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APES 110 is the code of ethics that all accountants must follow in order to work under a
systematic and civil environment. The said code was legalized by the Accounting Professional
and Ethical Standards Board, better known as APESB, after its initial establishment in the year
2006. Keeping the singular goal of development and issue of rules that would create ethical
standards in order to fulfill both public and professional interests in their mind, the board created
by the joint effort of both the Institute of Chartered Accountants and the CPA, in Australia
(Cheffers and Pakaluk, 2017).
If life is boat then rules and regulations are the mast and rudder that direct its course.
Same can be said in the case of the professional world where accounting principles play a key
real in order to avoid confusion, dissatisfaction, criminal offences, threats and frauds that are
most common problems a financial institution or even a normal person can face in his daily
struggles. APES 110 are a code that directs accounts all over the world as issued by the
International Ethics Standards Board for Accountants (IESBA) of the International
Federation of Accountants (IFAC). Like every prospect of life have their principles, so does
the APES 110 (Accounting Professional and Ethical Standards Board, 2013). To create trust and
Legality among the many people living in the society and various financial entities, the Board
has issues principles that the accountants can relate with the daily life, they are:
1. Integrity
2. Objectivity
3. Professional competence
4. Confidentiality
5. Professional behavior

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It is required that an Accountant is honest and dutiful when it comes to fulfilling his job, either
professionally or for a personal client while being biased and avoiding unwanted influence
(Arens et al, 2007). It is also expected of him to have the knowledge of his work and swear a
vow to secrecy for his client whenever need, while at the same time, being calculative and
professional to the utmost degree. The principles are described in utmost detail in the sections
110 to 150 of the APES.
The code has provided a clear review of the threats that are experienced by a financial
institution in various circumstances depending upon the relationships the parties have.
Paragraph 100.12 of the code has divided threats into ones driven by ‘Self Interest’, ‘Self
review’ as in improper evaluation of a situation, ‘Advocacy’, ‘Familiarity’ and ‘Other
Intermediate’ threats (Flanagan & Clarke, 2007). By, this it can be said that APES has shown
clear knowledge of where public interests might lie and what needs to be done in order to keep
these interests fulfilled at all cost, there are paragraphs in the text that make the necessity of such
stringent laws very clear, For example:
1. Paragraph 100.13, provide safeguards and actions that can prevent or, can be used to either
stop or completely eliminate a possible threat that fall under either professional legislations or
work environment.
2. Paragraph 100.22, states that, in the best interests of Members the substance of the issue,
details of discussions held and decisions made regarding the issue should be documented.
It is quite evident from the above discussion that ethics are more or less derived from our daily
lives in one way or the other. Both the paragraphs are evidences to support not only the legality
of the code, but also how necessary its stand in the society is. The conceptual framework that

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APES 110 has created in its columns influences both ‘Public Practices’ and ‘Members
Involved in Business’ (Cpaaustralia.com.au, 2017).
For the members in public practice, the principles prevent the occurrence of fraud and
situations that threaten the fundamental rules and regulations for example, it will create a self-
interest threat when there is an undue dependence of the total fees that can be extracted from a
client (Pflugrath, Martinov-Bennie and Chen, 2007). Certain example of the sections that solidify
the position of the various members of the is group are, Section 230 which requests for second
opinions from persons who are not involved in the financial affair that is going to be dealt with
what so ever, such that persons in question, who are supposedly involved in the public practice
can give their valid opinion a solidify a point in defense or against the movement that is
discussed or debated upon while taking a potentially important financial decision (Dellaportas
and Davenport, 2008). Similarly, Section 240 directs all public practitioners to evaluate any
threat that might arise from the dissatisfaction of a customer of not fulfilling the fundamental
laws and principles in question as in the fees that is quoted by the client. It is their duty to reduce
the fees to acceptable levels. If these conditions are not met then a threat of self interest can be
created, such a situation can be seen if suppose the fees that is in question is so low that the basic
activities of the financial institution remain unfulfilled, such a situation can arise from time to
time in case of a basic mistake or a fraud (Jackling, Cooper, Leung and Dellaportas, 2007). In
addition to all that, it is seen that the Sections 290 and 291 deal with independence as in ‘The
Independence of Mind’ and ‘The Independence in Appearance’. These two concepts direct the
accountants to work without listening or bothering themselves with information that is not
skeptic of the issue they are working on. Helps them establish integrity in their character and
reach proper conclusion with a proper mindset (Martinov-Bennie and Mladenovic, 2015).

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Similarly, it is essential of an accountant to avoid any fact that is not necessary or unreasonable
in the case that is in their hand. Such situations make it easier for both the accountants and the
general public to interact more freely without getting into fraudulent situations that would, in
most cases lead to the creation of distrust and panic.
Similar conditions are seen in the case of members in business. In fact, the rules that
guide this section of the financial world can also help the public practitioners with their work. In
the end, these sections, along with the general public are all interdependent and need each other
for their existence in the financial world or the business society (Kaidonis, 2008). Their relation
with the rest of the society can be seen through the laws mentioned in its various sections just
like in the case with the Public Practitioners. Examples of such sections provided in the said code
of APES 110 are: Section 350, which focuses on business inducement. It is seen in various cases
that families of certain employees are given special treatment, luxury, hospitality, gifts and offers
of a potential friendship, just to induce them into a forced loyalty or just for the sake of
attraction. Such cases may turn into Self-Interest threats and if exposed, the reduction of
goodwill. This section intends to stop such acts for the sake of the better good of the institution.
Similarly, Section 330 makes it clear that an employee can in no way provide their employers
with exaggerated or false information about their work experience and qualifications just to get
employed or place themselves in their good books. It is expected of an employee to be truthful to
his peers and to seniors. False information can lead to distrust or hostility among people working
with each other in a financial institution. Avoiding such situations will result to an overall
development of the financial institution.
With all that was discussed above and the evidences and references that written of, it can
clearly be said that not only is the code APES 110 important as a part of financial accounting and

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its principles, but these set rules were derived in order to deal with complexity of our human
psychology and to neglect any potential differences of opinion that might happen between a
financial institution and the rest of the society, with the sole purpose of neglecting such mishaps
and moving on to fulfilling the bigger task of the development of both the institution and the
economy (Brooks and Dunn, 2011). In the cases discussed, both in the financial and public
backgrounds, it can be seen how honesty and trust are kept above all else. A company which is
based on lies cannot see a bright future ahead of themselves. Considering the malpractices that
are being committed in the financial world today, it is evident that rules are required for a safer
journey in the market that involves, not only other companies by people who are involved in the
play of finance altogether (McManus and Subramaniam, 2009). To build trust, it is necessary
that the institution forge a good reputation in the society and create their goodwill.
In conclusion, it can be confirmed that APSE 110 code is a boon to the financial market
and to the accountant culture as a whole. The tests that are conducted by the CPA or the
Institution of Chartered Accountants in Australia are not only beneficial for the upcoming
generation of accountants, but, are beneficial for the society. The ethics thus help contribute
towards the development of greater trust of the public in the accounting profession and remove
any potential discomfort that might arise by avoiding a situation of distrust in and every way
possible.

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References
Accounting Professional and Ethical Standards Board (APESB). (2013). APES 110 Code of
Ethics for Professional Accountants.
APES 110. (2017). Cpaaustralia.com.au. Retrieved 12 September 2017, from
https://www.cpaaustralia.com.au/professional-resources/accounting-professional-and-ethical-
standards/apes-110-code-of-ethics-for-professional-accountants
Arens, A. A., Best, P., Shailer, G., Fiedler, B., Elder, R. J., & Beasley, M. (2007). Auditing and
assurance services in Australia: an integrated approach. Pearson Education Australia.
Brooks, L. J., & Dunn, P. (2011). Business & professional ethics. Cengage Learning.
Cheffers, M., & Pakaluk, M. (2007). Understanding accounting ethics. Sutton, MA: Allen David
Press
Davenport, L., & Dellaportas, S. (2009). Interpreting the public interest: A survey of professional
accountants. Australian Accounting Review, 19(1), 11-23.
Dellaportas, S., & Davenport, L. (2008). Reflections on the public interest in
accounting. Critical perspectives on accounting, 19(7), 1080-1098.
Flanagan, J., & Clarke, K. (2007). Beyond a Code of Professional Ethics: A Holistic Model of
Ethical Decision‐Making for Accountants. Abacus, 43(4), 488-518.
Jackling, B., Cooper, B. J., Leung, P., & Dellaportas, S. (2007). Professional accounting bodies'
perceptions of ethical issues, causes of ethical failure and ethics education. Managerial auditing
journal, 22(9), 928-944.
Kaidonis, M. A. (2008). The Accounting Profession: Serving the public interest or capital
interest?. Australasian Accounting Business & Finance Journal, 2(4), 1.

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Martinov-Bennie, N., & Mladenovic, R. (2015). Investigation of the impact of an ethical
framework and an integrated ethics education on accounting students’ ethical sensitivity and
judgment. Journal of Business Ethics, 127(1), 189-203.
McManus, L., & Subramaniam, N. (2009). Ethical evaluations and behavioural intentions of
early career accountants: the impact of mentors, peers and individual attributes. Accounting &
Finance, 49(3), 619-643.
Pflugrath, G., Martinov-Bennie, N., & Chen, L. (2007). The impact of codes of ethics and
experience on auditor judgments. Managerial Auditing Journal, 22(6), 566-589.