Comprehensive Report: Professional Ethics in Finance and Accounting

This report delves into the realm of professional ethics, specifically within the finance and accounting sectors. It begins by outlining fundamental ethical principles, such as integrity and objectivity, and then explores the impact of legal, regulatory, and ethical requirements on financial practices. The report examines the role of professional bodies in upholding ethical standards and emphasizes the need for individuals and organizations to adhere to codes of conduct. It also highlights the risks associated with unethical practices and the importance of vigilance. Furthermore, the report discusses ethical conduct with clients, colleagues, and suppliers, emphasizing the need for objectivity and professional distance. It covers the importance of adhering to organizational values, codes of practice, and regulations, including those related to client funds. The report also addresses reporting procedures for unethical behavior and strategies for preventing ethical conflicts. Finally, it explores the importance of an ethical approach to sustainability and the responsibilities of finance professionals in upholding these principles. The report uses HSBC as a practical example, providing real-world context to the concepts discussed.

Professional Ethics

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1: Fundamental principles of ethical behaviour.......................................................................1
1.2: Legal, regulatory and ethical requirements affect financial and accounting sector.............2
1.3: Role of Professional Bodies in Accounting and Finance sector..........................................2
1.4: Need for individuals, organisations or industrial sectors to operate within codes of
conduct and practice....................................................................................................................3
1.5: Explain the risks of improper practice to an organisation and the importance of vigilance3
1.6: Identify opportunities for maintaining an up-to-date knowledge of changes to codes of
practice, regulation and legislation affecting the accounting and finance sector........................4
TASK 2............................................................................................................................................4
2.1: Explain how to act ethically when working with clients, suppliers, colleagues and others 4
2.2: Explain the importance of objectivity and maintaining a professional distance between
professional duties and personal life at all times........................................................................4
2.3: Explain the importance of adhering to organisational and professional values, codes of
practice and regulations...............................................................................................................5
2.4: Explain the importance of adhering to organisational policies for handling clients’ monies
.....................................................................................................................................................5
2.5: Identify circumstances when confidential information should be disclosed and who is
entitled to the information...........................................................................................................5
2.6: Explain the importance of working within the limits and confines of one’s own
professional experience, knowledge and expertise.....................................................................6
TASK 3............................................................................................................................................6
3.1 Identify the relevant authorities and internal departments to which unethical behaviour,
breaches of confidentiality, suspected illegal acts or other malpractice should be reported......6
3.2 Identify the appropriate action to take in instances when requests for work are beyond the
employee’s competence..............................................................................................................7
3.3 Identify inappropriate client behaviour and how to report it................................................7

3.4: Explain the internal and external reporting procedures which should be followed if an
employee suspects an employer, colleague or client has committed, or may commit, act which
is believed to be illegal or unethical............................................................................................7
3.5 Outline strategies that could be used to prevent ethical conflict..........................................8
TASK 4............................................................................................................................................8
4.1: Explain the importance of an ethical approach to sustainability.........................................8
4.2: Outline the responsibilities of finance professionals in upholding the principles of
sustainability...............................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................9

INTRODUCTION
Professional ethics is defined as the principles that governs the behaviour and attitude of
people or group of people in business environment. It describes an act which is performed by
employees towards its co-workers as well as an organisation in dynamic environment. For this,
the management is held liable to ensure that all the employees are working according to the rules
and guidelines implemented by Top authorities and Government of nation where the company
has been operated. The present assignment report outlines the principles of ethical behaviour and
its role while deal with internal as well as external customers. The project includes the corrective
actions that to be taken at the time of breaching of ethical codes along with the ethical
responsibility of finance professional in promoting sustainability. HSBC, a UK based company
which is engaged in providing banking and financial services at global level is taken as an
example to complete the present assignment report more effectively.
TASK 1
1.1: Fundamental principles of ethical behaviour
There are mainly five fundamental principles of ethical behaviour according to the ICAS
code of ethics which are listed as under:
Integrity: It is an essential element which should be present in professionals in order to conduct
business operations more smoothly. The managers of an organisation such as HSBC should be
more transparent, honest and straightforward towards its policies so that it makes easy for
employees to understand and follow while performing allotted task (Asgari, 2016).
Objectivity: Professionals in organisations should be focused towards its target and continue to
operate business functions without facing any conflict with others or under external influence. It
maximises the chances of achieving desired target within limited time period.
Confidentiality: Such principle directs professionals to maintain the privacy of their confidential
information so that it would not be misuses by any other professional for their own purposes and
benefits.
Professional competence and due care: Professionals in an organisation must have sufficient
amount of skills and specialised knowledge in order to facilitate customers more effectively so
that their loyalty towards organisation can be retained successfully.
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Professional behaviour: It includes the policies and regulations that must be followed by
professionals while carrying out their work within an organisation. It increases their position as
well as reputation among their rivals (Brands, Bronkhorst and Welie,2011).
1.2: Legal, regulatory and ethical requirements affect financial and accounting sector
In UK, there are number of organisations operated in different sector among which
financial and accounting sector is such two which are compulsorily required to follow legal,
regulatory and ethical requirements. Here are the some important aspects for essential
compliance:
Legal Acts:
Civil Law: It is a law which protect the rights of an individuals by governing their
personal matters. It is much different from criminals and political matters. It may affect both
finance and accounting sector in order to get personal information of customers for verification.
Criminal Law: Such law directs both these sectors to not indulge in any criminal activity
which can adversely affect the interest of customers. Such criminal activities includes
threatening, endanger, coercion etc. which affect behaviour of customers. It negative impact on
their market image which results in decreasing their revenue.
Regulations affecting financial and accounting sector: Securities and Exchange
Commission (SEC) regulates the securities market with an aim of protecting investors against an
unethical activities. This kind of regulation motivates them to invest more and help through
protecting their stability in financial and accounting sector (Convery and Outslay, 2012).
Ethical requirements: Businesses engaged in finance and accounting sector should
conduct ethical activities to protect the rights and interest of their customers through maintaining
their confidential information and discloses all terms and conditions towards them while dealing
with them.
1.3: Role of Professional Bodies in Accounting and Finance sector
Functions of every business organisations whether engaged in financial or accounting
sector are governed by different professional bodies existing in UK. Here are the some brief
description of some professional bodies:
Association of Accounting Technicians (AAT): It came into existence in the year 1980
which is engaged in offering skills-based accountancy and finance qualifications. It regulates its
members to comply with ethical requirements and maintain discipline within an organisation.
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Institute of Chartered Accountants in England and Wales (ICAEW): It is a professional bodies
which is responsible to meet competencies of finance and accounting industry in England and
Wales. To engage in providing financial services, ICAEW members must pass the Chartered
accountant qualification (DeMartino, 2011).
International Federation of Accountants (IFAC): It is another professional body which
governs and strengthening the accounting and financial sectors by motivating them to set
professional standards. It is held liable to maintain reports, comment letters and position papers
which are relevant to accounting sector.
1.4: Need for individuals, organisations or industrial sectors to operate within codes of conduct
and practice
There are number of stakeholders engaged in supporting financial as well as accounting
sector are required to comply with code of conducts and practices so as to enable organisation to
run more smoothly. It directs employees as well as stakeholders to provide quality services to
their customers without indulging in any illegal practices. It is essential to implement code of
conducts in order to support economic, social and political integrity of employees at workplace.
Non-compliance of such code of conducts brings negative outcomes to company which includes
negative image in public, facing huge penalties imposed by government etc. which diminishes
the trust and loyalty of its clients. Therefore, it is must required for organisation engaged in
banking sector such as HSBC to follow determined code of conducts which support in
maintaining healthy environment at workplace (Greenwood and Freeman, 2011).
1.5: Explain the risks of improper practice to an organisation and the importance of vigilance
Every organisation is responsible to implement ethical practices at workplace so as to
motivate employees to perform in ethical way. It maintains health environment at workplace
which creates harmony among employees. Therefore, it is essential for professionals to follow
legal laws and legislations so as to work with strong moral values and beliefs. Somehow, if laws
are not implemented properly then it will bring negative outcome to the sustainability of an
organisation. Such negative outcomes includes reducing brand image, paying huge fines and
penalties imposed by government, loses trust and loyalty of its clients etc. To maintain harmony,
the management is responsible to examine the performance and activities of each employees in
order to ensure that no employees should be indulged in any illegal or misconduct activities.
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1.6: Identify opportunities for maintaining an up-to-date knowledge of changes to codes of
practice, regulation and legislation affecting the accounting and finance sector
It is important for an organisation engaged in accounting and finance sector such as
HSBC to get update regarding changes in codes of practices, regulation and legislation so as to
not affected from them in negative manner. For this, the management is responsible to track the
changes and accordingly took corrective measures in order to comply with such changes more
effectively. It brings various benefits for company after identifying suitable changes in terms of
creating healthy environment, minimising conflicts, expansion in new markets etc. It directly
provides an opportunity to company to make changes in their existing plans and policies so as to
ensure about complaints with new changes implemented in code of conducts (Imanipour, 2012).
TASK 2
2.1: Explain how to act ethically when working with clients, suppliers, colleagues and others
Professional ethics are related with the moral decisions of individuals regarding right or
wrong. These decisions can be taken regarding maintaining interest of its interested parties
which includes clients, suppliers, colleagues and other parties. An organisation gets maximum
support from them in maintaining their sustainability due to which they are ethically responsible
to act with them with an appropriate manner. It required to conduct proper behaviour and
communication with them on regular basis so that the chances of arising conflicts at workplace
will be minimised. Bringing customers into confidence by disclosing all terms and condition
while making transactions increases their satisfaction level. Formulating an effective plans and
policies for the welfare of employees and allow them to get involve in decision-making process
will maximises their working behaviour at workplace.
2.2: Explain the importance of objectivity and maintaining a professional distance between
professional duties and personal life at all times
Objectivity may be defined as implementation of decisions without conducting any
biasness thus it is important for an organisation to undertake objectivity which directs them to
make reliable and effective decisions without getting interferences by external parties. It results
in increasing effectiveness of the decisions which increases satisfaction level of employees as
well as their clients. For this, employees should keep their personal as well as professional life
separate which makes easy to make unbiased decision. For example, granting loan to relatives at
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lower rate of interest than others should be prohibited. Therefore, it is important for workers to
understand their roles and responsibilities towards its company and perform accordingly.
2.3: Explain the importance of adhering to organisational and professional values, codes of
practice and regulations
Code of conduct directs the person to act against the other people in more ethical way so
that the interest and rights of people can be maintained. Following code of conducts increases the
employees turnover which brings long term advantages to company. If the employees have
sufficient knowledge that how to deal with others and what should not be done then the chances
of occurring problems at workplace will be minimised. Employee ethics is essential for
improving the value system of workers (Koehler, 2015). By complying with codes of practices,
the employees secure their job position and increases loyalty and work commitment with
company for longer period of time. Therefore, it is the responsibility of employees to conduct
activities according to the code of practices and restrict themselves towards politics, criticizing
other workers etc.
2.4: Explain the importance of adhering to organisational policies for handling clients’ monies
Client monies refers to the money or kind of documents retained by the HSBC of their
clients with an objective of providing them suitable rate of interest. Following rules and
regulations by employees brings advantages to an organisation. Working with reputed and
skilled staff brings positive impact on the decisions of customers regarding making further
transactions with bank. While dealing with the customers more effectively, it directly makes
positive impact on their satisfaction level due to which the number of complaints are also
minimum which increases morale and goodwill of company. As people desired to transact with
company who has attained good reputation and trustworthy where they ensure about the security
of their deposits in the Bank.
2.5: Identify circumstances when confidential information should be disclosed and who is
entitled to the information
In HSBC, there are number of circumstances in which the confidential information can be
disclosed by the customers towards its banks:
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When the law complete it to: HSBC can disclose confidential information of its clients
only if court directed them due to creating evidences regarding clients affair's. It should also be
informed to the Income tax department and Ministry of Social Development (Phillips, 2013).
With the consent of customers: HSBC should also discloses client's confidential
information only if they received consent from them without conducting any misconduct
activities. It can be disclosed in the presence of clients and according to their direction.
Binds organisation to disclose information to protect their interest:
2.6: Explain the importance of working within the limits and confines of one’s own professional
experience, knowledge and expertise
It is essential for individuals to work within limits so as to avoid any kind of pressure
which decreases their performance level at workplace. For this, the management should first
communicate to its clients regarding their roles and responsibilities and on the basis of which
guiding them to perform within allotted work boundaries. Every employees desired to perform
various tasks in order to show their actual capabilities and strengths but the fact is it reduces their
efficiency level in their current performance. Thus, focusing on single task to execute requires
less time and brings maximum output rather than performing different task at the same time.
TASK 3
3.1 Identify the relevant authorities and internal departments to which unethical behaviour,
breaches of confidentiality, suspected illegal acts or other malpractice should be reported
HSBC have different options to report unethical behaviour, breaches of confidentiality,
illegal or criminal activities with an expectation of getting optimum resolving solutions. Internal
departments should be appointed by the company with the purpose of resolving conflicts and
took strict actions against such unethical activities. Apart from this, the employees can report to
the Banking Ombudsman appointed by the government authorities. Here are the external
agencies to whom unethical practices can be reported:
Public Concern at Work: It is an institution which is formed with the purpose of giving
suggestions and advices to the employees relating to raising their voice against the unethical
practices faced by them at workplace (Louwers and et. al., 2015).
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Labour Relations Agency (LRA): It is another institution which is established with an
objective of providing free confidential and unbiased advices related with the problems or issues
of employment rights and unethical practices.
3.2 Identify the appropriate action to take in instances when requests for work are beyond the
employee’s competence
There are several actions which can be implemented in case of requesting for work which
are beyond their competence. Some of which are given as under:
Adaptability: In this, the management looking out to bring new changes in their existing
plans and strategies so as to maintain healthy atmosphere at workplace.
Attention to detail: Management is responsible to rectify the details through verifying
them twice so as to ensure company about its accuracy and reliability of information.
Collaboration: Management must give an opportunity to its workers to get involved in
decision-making process so as to increase effectiveness and gives better result to company.
Communication: Management should communicate well to their employees regarding
their roles and responsibilities after identifying their actual strengths and capabilities which can
be done through reviewing their past performance (Parker, 2013).
3.3 Identify inappropriate client behaviour and how to report it
There are several inappropriate practices which can be identified at workplace such as
criminal offence, non-compliance of law, damage to environment, unethical behaviour,
breaching confidentiality etc. It all affects the functioning of HSBC. Such issues can be reported
towards the grievance officer, HR professionals or other persons after analysing the accuracy and
reliability of issues. Apart from this, criminal offences can be reported to police, court or
agencies which includes Labour Relations Agency, Public Concern at Work.
3.4: Explain the internal and external reporting procedures which should be followed if an
employee suspects an employer, colleague or client has committed, or may commit, act
which is believed to be illegal or unethical
Individuals working in HSBC need to make a qualifying disclosure in order to disclose
the details related with unethical behaviour conducted in HSBC. Individuals must be ensure
about the truth regarding unethical practices so that further action can be implemented
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accordingly. Following are the some requirements which must be fulfilled while disclosing
information towards prescribed person:
 Reasonable believes that the disclosed information is true and genuine.
 Reasonably believe that disclosure is disclosed to the right individuals.
Individual should disclose information only after taking legal advices and suggestions
from their legal advisor due to acquiring knowledge of receiving outcomes in future.
3.5 Outline strategies that could be used to prevent ethical conflict
Strategies to prevent ethical conflict are determined as under:
Know the law: The organisations as well as employees need to know about various laws
which can be helpful to minimise issues and conflicts at workplace.
Set expectations: The management of HSBC should formulate an effective policies on
the basis of its mission and code of conduct so as to help its employees to know their roles and
responsibilities.
Train your employees: Management need to conduct training to its staff in order to teach
them to behave in ethical behaviour (Qimin, 2013).
TASK 4
4.1: Explain the importance of an ethical approach to sustainability
The ethical approach of sustainability directs the company as well as employees to
comply with riles and code of practices if wants to sustain in market for longer duration. It
maintains healthy environment at workplace which minimises the issues and conflicts among
employees at workplace. Such approaches directs the company to utilise its available resources
in an optimum manner so as to increase their sustainability in market for longer period of time
(Sobhani Nejad and et. al., 2015).
4.2: Outline the responsibilities of finance professionals in upholding the principles of
sustainability
Sustainability is a contingent in nature due to which it requires an adequate support from
the various departments of HSBC. Finance professional must attained an adequate skills and
attributes in order to measure and enhance the sustainability. For this, the manages of different
divisions of HSBC should communicate with each other and accordingly make suitable strategies
to achieve high sustainability. Identifying issues and resolving them through implementing
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corrective actions which should not harm the interest of both conflicted parties will maximises
the efficiency in their performance level.
CONCLUSION
It has been concluded from the above project report that Professional ethics plays a
significant role in executing business operations more smoothly. For this, the management is
held responsible to implement codes of conduct and practices so as to follow by their employees
at workplace. Organisations such as HSBC should also ensure that their employees follows laws
and regulations in more appropriate manner. To achieve sustainability, an organisation must
secure confidential information following all legal laws and acts.
REFERENCES
Books and Journals
Asgari, H., 2016. The relationship between professional ethics and the efficiency of the nurses
employed in Imam Hospital and Mostafa Khomeini Hospital in Ilam. Iranian Journal
of Medical Ethics and History of Medicine. 9(3). pp.65-73.
Brands, W.G., Bronkhorst, E.M. and Welie, J.V.M., 2011. Professional ethics and cynicism
amongst Dutch dental students. European Journal of Dental Education. 15(4). pp.205-
209.
Convery, S. and Outslay, E., 2012. Assessing professional ethics in tax: A case on uncertain tax
positions. Journal of Accounting Education. 30(1). pp.80-99.
DeMartino, G.F., 2011. The economist's oath: On the need for and content of professional
economic ethics. Oxford University Press.
Greenwood, M. and Freeman, R.E., 2011. Ethics and HRM: The contribution of stakeholder
theory. Business & Professional Ethics Journal, pp.269-292.
Imanipour, M., 2012. Ethical principles in education. Iranian Journal of Medical Ethics and
History of Medicine. 5(6). pp.27-41.
Koehler, W., 2015. Ethics and values in librarianship: A history. Rowman &
Littlefield.Phillips, J., 2013. PMP, Project Management Professional (Certification
Study Guides). McGraw-Hill Osborne Media.
Louwers, T.J., and et. al., 2015. Auditing & assurance services. McGraw-Hill Education.
Parker, M. ed., 2013. Ethics and community in the health care professions. Routledge.
Qimin, S., 2013. On the practical character of teachers’ professional ethics. Educational
Research. 11. p.19.
Sobhani Nejad, M. and et. al., 2015. Teaching Professional Ethics Components from the
Viewpoint of Students Qom University of Medical Sciences. Education Strategies in
Medical Sciences. 7(6). pp.399-403.
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