Applying Ethical Frameworks and Principles to Financial Decisions

This report examines the application of ethical frameworks and principles in accounting, particularly in the context of challenges faced by public accountants during a pandemic, such as understaffing, complex tasks, and time constraints. The report frames the ethical situation, emphasizing the importance of integrity, objectivity, and professional competence as outlined in the APES 110 Code of Ethics. It provides recommendations for accountants to navigate these challenges, including maintaining ethical obligations, adapting to digital modes of working, and re-assessing risks. The report also proposes an implementation plan, addressing how auditors can adapt audit procedures, utilize technology for remote assessments, and ensure the effectiveness of internal controls. The study highlights the need for ethical considerations in financial reporting and decision-making, especially during times of crisis, and offers guidance for accountants to maintain ethical conduct and fulfill their professional responsibilities.

Apply Ethical Frameworks and
Principles to Make and Act Upon
Decisions

ABSTRACT
The study summarises what challenges public accountants are facing due to recent flu
outbreak which help to frame ethical situation in relation to conduct audit in the given case
scenario where firm is understaffed, task is complex and required to be done within required
timeframes. The study contains recommendations to deal with such issues and effective
implementation plan to assist accountants in working in present condition.

Contents
ABSTRACT.....................................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Frame the ethical situation:....................................................................................................4
Response with recommendations:..........................................................................................6
Implementation Plan:..............................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The ethical framework relates to a collection of codes used by a person to direct actions of
individual. Term Ethics is just what individuals use to differentiate difference between right and
wrong and the manner they communicate with the universe. So, premised on moral judgment,
what people consider to be best solution to a specific problem is regarded as a moral framework.
Moral values contribute to enhance behaviour, foster dignity and build and maintain
relationships with others. Understanding what is correct or incorrect is a vital aspect of life that
forms an individual's behaviour (Taplin, Singh, Kerr and Lee, 2018). Strong ethical values
enable an individual to start making the best choices and to strengthen their relationships with
others. The study covers various aspects of Ethical framework and principles like framing ethical
situation, responding with recommendations, implementation plan and related supplementary
materials in context of given case study.
MAIN BODY
Frame the ethical situation:
Natural catastrophes issues have driven most companies to establish a emergency management
program in the case of a devastating office or network failure, but none have acknowledged the
possible effects of a major flu outbreak, like the recent Coronavirus epidemic. Consider how life
will change whenever a substantial part of the working population has to stay at their home from
work because they're either ill or but since they cared for family members who've been ill.
Consider the effects of the viral disease spreading to an endemic problem level, especially if city
administrators indicated people would stay at homes and prevent public areas for delivery of
goods to food stores and supermarkets (Hay, 2019).
True, knowledgeable and impartial virtues, especially in difficulty, are greatly regarded for all
practitioners. A widely developed, explained and well-structured Global Code of Ethics directing
judgment and success is a resource for accounting professionals. Trustworthy financial reporting
as well as unbiased auditing have become very important to shareholders and other interested
parties and are important for the management of the results of and exit from sudden disaster.
Confidence in financial reports is crucial to minimize damage and restore source of revenue for
recovering, particularly in times of adversity (Hay, Stewart and Botica Redmayne, 2017). The
pandemic causes a variety of financial, organizational and personal problems. Accounting

professionals must now be more cantered than that on one’s ethical obligations and public
interests. The basic principles stay essential in corporation: integrity, skill and due diligence,
objectivity, appropriate conduct and anonymity — each one in today's situations draws a more
accurate meaning. The sudden shift to digital modes of working, combined with challenges other
companies face in maintaining viable businesses, may create pressure imposed by supervisors,
consumers and others on PAs to perform tasks without sufficient expertise or preparation, or
within an unreasonable timeframe (West and Buckby, 2018).
Apes 110 Code of Ethics for accounting professionals creates a clear structure for
practice professional accountants to conform to when performing their audit task in order to
prevent any type of risk that could impact their independence. Failing to address the norm could
lead to disciplinary action. There is also a substantial obligation put on members to ensuring that
they follow these requirements. The purpose of APES 110 isn't just to take attention away from
any responsibility that may be enforced by rules or regulations. Under Corporations Act 2001
(the Act), Australian Auditing and Assurance Standards Board (AUASB) has enacted
auditing standards as regulatory components. Those requirements have legal constitutionality for
audits and assessments under Act. Part A sets out the essential principles of ethical conduct for
members and offers a theoretical basis for Members to recognize threats to conformity with the
basic values, determine the importance of identified risks and apply protections to remove them
drought or reduced to an appropriate amount (Harris, 2017). APES 110 necessitates that a
Member should comply the following basic principles:
 Integrity: To be sensible and fair in all the business as well as professional relations.
 Objectivity: Not to enable for the overriding of qualified or business judgments by bias,
conflicts of interests or undue influence.
 Professional competence and due care: Maintain relevant professional knowledge as well
as expertise to level appropriate to make sure that client or employer requires qualified
training practices based on existing trends in practice, regulations and procedures and
works faithfully and in compliance with appropriate technical and ethical standards.
 Confidentiality: To maintain confidentiality of information obtained as a consequence of
company and professional connections including not to reveal any information to
External parties without sufficient and precise permission, until there is legal or

contractual right or obligation to reveal information or to exploit it for personal gain
of Member or of 3rd parties.
 Professional behaviour: Compliance with applicable laws and legislation and avoiding
any conduct which discredits profession (Mpinganjira, Roberts-Lombard, Wood and
Svensson, 2016).
The Code forbids PAs to cause pressure from other to contribute to infringement of regard
for democratic values. This also restricts PAs from putting pressure on those that will also result
them to infringe basic principles. code describes how to recognize, assess and address pressure-
related risks. Situations change quickly with rapid unpredictability and many firms are facing
serious discomfort unexpectedly. In order to remain faithful to the basic principles, accounting
professionals should be flexible, update and sceptical. Accountants must be willing to re-assess
the risks and re-examine steps they take to protect their independence. In serious distress,
businesses and organisations need to rapidly switch modes of working — heading online and
working from home are the perfect examples — but need support in finding specific publicly or
privately aid (Rillotta, Arthur, Hutchinson and Raghavendra, 2020). Of course, qualified
accountants should help and guide their working organisations or clients in adapting and
recovering; however, counselling and assist must be balanced without placing pressure on them
to behave contrary to their ethical obligation. This implies that auditors do not assume
responsibility for the management of a user Audit. In such situations, increased contact with
those entrusted with governance would prove necessary. Public sector accounting professionals
also have to focus more on ethical tasks. The situation needs a massive development of financial
initiatives by governments. Acts in public sector will require complex choices in pursuing
policies that combine human safety, economic and socialist objectives. In taking decisions,
determining policy results and preserving fiscal stability, quality of knowledge will be essential.
Response with recommendations:
Professional accountants must respect five fundamental standards of ethics laid down in Code,
that is, honesty, objectivity, ethical competence and proper consideration, integrity and ethical
conduct, regardless of responsibilities, ethical duties and conditions under which Code operates.
They are often needed to implement conceptual framework of Code in order to recognize,
analyse and potential risks to compliance. Preferably, PAs are positioned to assist employing
NGOs, customers, government entities, and public bodies to steer pandemic via their knowledge,

skills as well as information preparation or presentation experience. This code needs that PAs
do in planning or delivery of information in manner which is not meant to confuse or adversely
affect contract or administrative outcomes. As a consequence of pandemic, multiple companies
face funding or solvency crises. PAs ought to be cautious in crisis circumstances that incentives
and threats exist for companies to misreport adverse events, to delay disclosure of critical facts,
or to present an inaccurate or deceptive image of financial circumstances (West, A., 2017).
In the framework of audit engagement, audit client's pressure for lower the rate of audit fee
could be enhanced if firm wants to complete extra work to resolve the pandemic-created audit
problems. The Code tends to make it clear that level of fees could develop a risk to
independence or intimidation. The abstract framework must be applied to companies to identify,
assess and highlight such risks to independence. Thus, here recommended that auditor should
withdraw from those audit engagements wherein it is not possible to undertake auditing work
with reasonable integrity, objectivity and independence. Although planning interim financial
statements is must for entities to report impacts of COVID-19 epidemic, along with ongoing
notification of all relevant details on all incidents that organizations have encountered during the
time covered. In addition, it is workable to constantly evaluate analyses of major potential risks
that help in attempting to make disclosures required (Porter, 2017).
Implementation Plan:
The flu outbreak like corona-virus pandemic have posed a range of concerns about
whether financial statements can be adequately audited if internal controls are altered due to
drastic shifts in the nature and operations of an organization. The auditing requirements
allow auditor to develop an awareness of controls applicable to audit, and to determine whether
they have been structured to effectively avoid or at least identify and redress material
misrepresentations that might be included in financial statements. This then requires auditor to
evaluate if they have been implemented. standards necessitate auditors to recognise how and
where financial statements could potentially carry a greater threat of material misrepresentation.
The auditor utilizes that knowledge to assist design what even more audit practices could be
efficient in identifying any possible material misstatement. Those additional audit procedures
could be control tests or even substantive audit processes. This may entail performing practices
remotely, as well as it is based on comprehending how client processes and controls its
procedures of financial reporting and operating transactions via financial statements (Khovrak

and Kozyarchuk, 2018). Certainly, accountants will develop a comprehension of controls
ostensibly placed into action during this time. A through auditors’ technique to get is inquiries to
get the comprehension, and that's definitely possible in this setting. The issue can face is
that audit team will go to a customer's premises in ordinary times, sit then obtain a knowledge of
internal management at once via going about how items work with each other in a meeting room
with many individuals. But obviously with remote research taking place, it could be harder to
bring people together and have a conversation. But, again, thought innovatively, there is no
justification why video - conferencing technologies cannot be used to do this. Effectively,
PA will also have a digital meeting to obtain this awareness and make some inquiries.
Afterwards, in normal environment, several of our conventional techniques, such as checking
documents, could be used to evaluate whether an authorization was implied on invoice, or
something of nature. Despite social-distancing in location, some of the conventional practices
that are normally performed at client site might not have been possible or it might be harder to
complete at least. That isn't to suggest auditors can't really think strategically about how assess
whether safeguards are placed into action. Using technologies such as video will definitely work
to monitor such processes, close to what we would do to monitor inventories. For instance, a
company worker can be requested by an accountant to insert such credentials to
access accounting system (Akbari, 2017). Use video feed, auditor will determine if the employee
is effective with certain codes or locked them out. Another thing is that the safeguards that could
be in effect at remote workplace customer site would be run primarily in homes of accounting
staff. An auditor will not find an unit seated at one site going thru their procedures and daily
activities, trying to file cabinets that kind of thing, so opportunities for auditor to
interpret accounting department's overall operations will be more restricted. Another widely used
method for either assessing the monitoring was applied or checking controls is examination.
Inspection typically means looking at original or source record where everything auditor can see
is evidencing the implementation or output under operation. In current environment, auditor may
either "take a glance" at original document through a client location-originating video stream
or "look" at digital documents from relevant documentation. When going to have to
looking digital documents of initial documents, auditor wants to able to record how scanned
image had been a true reproduction of original docs they have been able to even get comfortable
with. For instance, if, at behest of auditor, a party goes to their workplace to review initial

invoices or records, the auditor may use video transfer technologies to allow auditor to watch the
company employee reviewing those records and deliver them to auditor and to ensure
that documents were not changed until they were transmitted by such digital means. If client
electronically sends papers to auditor for auditing inspection, a healthful dose of auditor's
professional scepticism is needed. Such environment may present problems, and as auditor look
at controls, it might lead to new threats of content misstatement being found. The atmosphere
can produce a different kind of hazards that we need to be conscious of. Consequently, it is
significant to consider the safeguards that the company has placed in place to minimize such
risks before planning more audit procedures (Sarkar, 2016).
CONCLUSION
From above study it has been articulated that consideration of ethics is essential for public
accountants to perform auditing task effectively. Throughout the pandemic conditions, many
working organisations and companies have switched to automated job modes to ensure
continuity of operation. It is critical for people in enterprise and public accounting to be aware to
the enhanced security threats when utilizing technological resources in work-from home
environment or moving data to their personal computers, to safety of data of their working
entities or clients. Compliance with the concept of ethical ethics requires complying with
legislation and regulations including preventing any actions that could undermine the practice
that PA understands or ought to be aware of.

REFERENCES
Books and Journals:
Taplin, R., Singh, A., Kerr, R. and Lee, A., 2018. The use of short role-plays for an ethics
intervention in university auditing courses. Accounting Education, 27(4), pp.383-402.
Hay, D., 2019. The Future of Auditing. Routledge.
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governance in Australia and New Zealand: A research synthesis. Australian Accounting
Review, 27(4), pp.457-479.
West, A. and Buckby, S., 2018. Ethics education in the qualification of professional accountants:
Insights from Australia and New Zealand. Journal of Business Ethics, pp.1-20.
Harris, H., 2017. A Short History of Applied Ethics in Australia', Ethics in the Global South
(Research in Ethical Issues in Organizations, Volume 18) (pp. 153-174). Emerald
Publishing Limited.
Mpinganjira, M., Roberts-Lombard, M., Wood, G. and Svensson, G., 2016. Embedding the ethos
of codes of ethics into corporate South Africa: current status. European Business
Review.
Rillotta, F., Arthur, J., Hutchinson, C. and Raghavendra, P., 2020. Inclusive university
experience in Australia: Perspectives of students with intellectual disability and their
mentors. Journal of Intellectual Disabilities, 24(1), pp.102-117.
Porter, D., 2017. Law and ethics in complementary medicine-a handbook for practitioners in
Australia and New Zealand [Book Review]. Australian Journal of Acupuncture and
Chinese Medicine, 11(1), p.31.
West, A., 2017. The ethics of professional accountants: an Aristotelian perspective. Accounting,
Auditing & Accountability Journal.
Khovrak, I. and Kozyarchuk, T., 2018. The impact of auditor’s ethics on the quality of auditing
the company's cash flows. Technology audit and production reserves, 1(4 (39)), pp.4-8.
Akbari, N.A., 2017. Identification and Prioritization of Ethics Enhancement Strategies in
Corporate Governance from Internal Auditing Perspective. International Journal of
Economic Perspectives, 11(1).
Sarkar, H.F., 2016. The impact of geographic proximity between auditor and client on audit
quality: empirical evidence from Australia (Doctoral dissertation, Curtin University).