Professional Ethics in Accounting and Finance: A Barclays Case Study

This report provides a comprehensive analysis of professional ethics within the accounting and finance sector, using Barclays as a case study. It explores the fundamental principles of ethical behavior, including integrity, objectivity, competence, confidentiality, and professional conduct. The report examines legal, regulatory, and ethical requirements affecting the sector, along with the roles of professional bodies in setting and enforcing ethical standards. It delves into the importance of operating within codes of conduct, the risks of improper practices, and opportunities for maintaining up-to-date knowledge. The report also discusses ethical work practices, the significance of objectivity, adherence to organizational values, and the handling of client money and confidential information. Furthermore, it addresses reporting procedures for unethical behavior, strategies for preventing conflicts, and the importance of an ethical approach to sustainability within the finance industry. The report concludes by emphasizing the responsibilities of finance professionals in upholding sustainability principles.

Professional Ethics

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Principles of ethical behaviour.........................................................................................1
1.2 Legal, regulatory and ethical requirements that affect accounting and finance sector....2
1.3 Role of professional bodies in relation to accounting and finance sector........................2
1.4 Reason about expectation to operate business within code of conduct and practice.......2
1.5 Risk of improper practice within an organisation and importance of vigilance...............3
1.6 Opportunities for maintaining an up-to-date knowledge of changes to codes of practice,
regulation and legislation which affect accounting and finance sector..................................4
TASK 2............................................................................................................................................4
2.1 Way to work ethically......................................................................................................4
2.2 Importance of objectivity and maintaining a professional distance between professional
responsibilities and personal life............................................................................................4
2.3 Importance of adhering to organisational and professional values, code of ethics and
regulations..............................................................................................................................5
2.4 Importance of adhering to organisational policies to handle clients' money....................5
2.5 Situations where confidential information needs to be disclosed....................................5
2.6 Importance of working within limits and confines of own professional experience,
knowledge and expertise........................................................................................................6
TASK 3............................................................................................................................................6
3.1 Authorities and internal departments where suspected illegal acts or other malpractice are
reported...................................................................................................................................6
3.2 Action to take in instances when requests for work are beyond the employee’s competence
................................................................................................................................................7
3.3 How to report inappropriate behaviour of client..............................................................7
3.4 Internal and external procedures to be followed for stopping illegal and unethical practices
................................................................................................................................................7
3.5 Strategies used to prevent ethical conflicts......................................................................8
TASK 4............................................................................................................................................8

4.1 Importance of an ethical approach to sustainability.........................................................8
4.2 Responsibilities of finance professionals in upholding the principles of sustainability...8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
.......................................................................................................................................................11

INTRODUCTION
Ethics can be defined as specific principles which govern an individual's behaviour to
work in professional manner. Code of ethics can be determined in terms of professional values
that incorporates principles and standards within a corporations. One of the main key traits of
individuals is adherence to a strict set of ethical guidelines (Hannafey and Vitulano, 2013). The
present report focuses on this concept which entails principles of ethical working, role of
professional bodies in accounting and finance sector as well as its role in promoting
sustainability. For this process, Barclays has been taken which is a British multinational
investment bank, situated in London. It is considered as one of the largest organisation in
banking sector which operate business on specific code of ethics.
TASK 1
1.1 Principles of ethical behaviour
Code of ethics referred as main aspects to control behaviour of professionals who are
associated with an organisation. In context with people working in finance and accounting
sector, they must comply with five main key fundamental principles as given below:-
 Integrity: It states that accountants must be forthright and candid with financial
information of business clients. They should work within restriction or limitation while
using confidential information as well as avoid intentional opportunity to manipulate the
same.
 Objectivity: Professionals in finance sector especially auditors must avoid conflicts of
interest as failure to remain independent and objective sometime hamper their status and
quo. Therefore, they must follow ethical values of objectivity and independence.
 Professional and technical competence and due care: It assists professionals to
exercise ethical or technical accounting standards as well as understanding information as
well.
 Confidentiality: Professionals must keep financial and personal information of clients
and business in confidential manner. They should not disclose such kind of data to third
party without permission and specific authority.
 Professional behaviour: They must follow rules and regulation as per professional or
ethical standards and avoid actions which discredit their duties.
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1.2 Legal, regulatory and ethical requirements that affect accounting and finance sector
There are various factors present in business environment which affect the legal
obligations of accounting and finance sector:
 The Law: It includes both civil and criminal law which states that certain activities of
business are acceptable as minimum standard but viewed as unethical also. For example:
Formulate policies to minimise the taxation on bill is considered as legal activity but in
terms of ethical standard, it is not considered as right as well.
 Compliance: Failure to comply business policies with set rules and regulations can lead
a business to face legal charges. In addition to this, government may take strict actions
against such companies as well. Therefore, professional deal in finance sector must
concern with compliances set by regulatory bodies so that business can be prevented
from unfair competition.
 Code of practice: Every organisation has set some specific set of ethical code of
practices which incorporate with professional values and principles. Therefore,
accountants of Barclays have followed written code of practice which are enforced by
disciplinary actions.
1.3 Role of professional bodies in relation to accounting and finance sector
In accounting and finance sector, every organisation used to set ethical guidelines either
in written or unwritten form (Hannafey and Vitulano, 2013). The main role of each professional
working in finance and accounting sector to understand the certain code of ethics and should
avoid conflict of interest. It includes Code of Conduct and Ethics for Employees, Discharge for
Cause, Financial Disclosure, Treatment of Confidential and Proprietary Information etc. In case
of discrepancy where professional finds itself with an apparent or actual conflict of interest, they
must disclose it to the Audit Committee with all necessary documentation. Further, committee
members will examine how such reported violation could be resolved.
1.4 Reason about expectation to operate business within code of conduct and practice
Ethics are generally concerned with the way that a professional should behave in a certain
situation. This will entail what is right or wrong thing that ultimately leads to morality. In context
with code of practices, it includes standards of conduct that are expected from individuals or
organisations to operate business within set rules. The main reasons behind expectation to work
within code of practices are:-
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 To protect the integrity of organisation or industry sectors.
 To encourage for diversity and equal opportunity within all levels of employment.
 To support social, political and economical integrity by individuals where they operate
their businesses.
Thus, code illustrates core professional behaviours and values which underpins the most
common encountered ethical consideration.
1.5 Risk of improper practice within an organisation and importance of vigilance
Conduct business in unethical manner leads to generate various kinds of risks. It damages
reputation of organisation or individuals and may leads to consequence of operational failures.
Operational risks in finance sector like Barclays can be categorised into two main components
that are:
 Internal Fraud: Intentionally seek confidential finance information of clients, tax
evasion etc.
 External Fraud: Data usage or theft by third party, hacking and more.
In this regard, financial professionals are needed to keep an eye on some aspects which
may leads to rise occurrence of such operational risks (Harfield, 2012). It includes money
laundering, terrorists financing, due diligence etc. Banks should monitor customer's transaction,
their business activities, ownership structure etc. Finance management should obtain information
about customer's risk profile through their due diligence processes. It includes source of funds
and wealth, purpose of opening an account, banking references, financial statements etc.
The term vigilance states that keeping an eye on certain activities of professional and take
actions accordingly, to promote fair practices. It assists individuals to concern on practices for
ensuring integrity in official behaviour and operations. Therefore, vigilance is considered as an
essential for every individual or organisation where rules and regulations are complex,
accountability is low, professionals have discretionary powers and they found to be corrupted.
Thus vigilance helps in setting up organisational policies as per governance system to identify
unethical practices and level of corruption.
1.6 Opportunities for maintaining an up-to-date knowledge of changes to codes of practice,
regulation and legislation which affect accounting and finance sector
Keeping up-to-date with code of practices and legislations seems to be much difficult and
time consuming process. But it is vital for every organisation like Barclays which deal in finance
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sector, to keep pace with changing rules. It will provide various benefits like- businesses can be
modified with changes and take consequential actions to stay compliant. Making alteration in
code of conduct will help in earning the trust of employers as well. Under this condition,
Barclays will become able to take better decisions in favour of business and employees. This will
lead to win a competitive edge and add business value by reducing insurance premium.
TASK 2
2.1 Way to work ethically
Ethics are considered as set of rules which states how to behave or conduct business
ethically. It defines what is right and wrong for a professional or organisation. For being a
professional, a person should give respect to colleagues. They should treat employees with
dignity and equality (Stappenbelt, 2013). In context with customers, organisations must ensure
that whatever services they are providing must accessible to all. Apart from this, it is also
essential for employers of Barclays to provide healthy and safe working environment to
employees, visitors and all associated people. Professionals should concern that on code of
practices also to avoid unfair wage, exploitation of child labour or any other violation of labour's
rights.
2.2 Importance of objectivity and maintaining a professional distance between professional
responsibilities and personal life
Maintaining professional and personal boundaries are considered as essential part of
work. It keeps individuals from risk of allegation which terms as a key of professional priority. It
shapes their relationship with colleagues, family members and other associated people (Forster,
2012). In general professional boundaries can be defined as limitations which state individual to
be friendly while working with others but not friend. It reduces the chance of being fatigue in
workplace as well. In general professional life focuses on completing own desires for
socialisation. While professional responsibilities relate with a purpose to meet demand of
business and fulfil client's requirement. Therefore, keeping a distance between profession
responsibilities and personal life, helps in reducing the chance of conflict of interest at work.
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2.3 Importance of adhering to organisational and professional values, code of ethics and
regulations
In general, three main components are there, which form the foundation of trust viz.
Ethics; Values and Laws. In this regard, ethics refers to sense of conducting business in right
manner. While values concerns on three main aspects that are morale, integrity and character.
Thus, both values and ethics create worth of trust and respect as well as promote sustainability
in business. Similarly, laws and legislations provide a sense of right to create certain code of
ethics. Thus, professional code of ethics will set a standard within an organisation. This would
help in preventing business from illegal and unethical activities to meed demand of customers. It
will also help in safeguarding ethics, increased productivity and teamwork among employees,
cultivating a strong brand image etc.
2.4 Importance of adhering to organisational policies to handle clients' money
Clients or customers are considered as the king in consumer marketplace. Therefore, keep
customer happy and gain their high satisfaction is the main of Barclays as commercial success of
its business is highly depended on them. Code of ethics is concerned on what should have to
applied within company's policies and procedures. Since Barclays Bank is listed on London
Stock Exchange therefore, it comply business with Corporate Governance Code of UK (Prakasha
and Jayamma, 2012). The Chartered Banker Professional Standards Board has set out
professional behaviour which are expected to be followed by financiers and auditors of this bank
especially. They should build trust with business clients and partners, collaborate proactively
with customers across all of Barclays to obtain best result. In order to handle client's money, this
bank has set policies where financial professionals must act in ethical manner. Financiers should
handle apparent or actual conflicts of interest between professional and personal relationships.
Along with this, accountant professionals are strictly prohibited from taking such actions which
mislead internal and external auditors for rendering the financial statements.
2.5 Situations where confidential information needs to be disclosed
Disclosure of confidential information in front of third party is strictly prohibited by law
(Robison, Pritchard and Ellin, 2012). But in certain conditions like an customer found to be
associated with money-laundering, terrorists financing or due-diligence, then professional
accountants of Barclays have right to disclose such information in compliance with legal
authorities. Any client when found suspected in money laundering then under the Terrorism Act
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2006 and Money Laundering Regulation 2007, it is a criminal offence. Therefore, it is an
essential duty of auditors to disclose confidential information to legal authorities. This would
help in reducing occurrence of adverse affect of criminal activities which may impact on
business reputation in negative manner as well.
2.6 Importance of working within limits and confines of own professional experience,
knowledge and expertise
Working within own limit states an individuals to clearly understand responsibilities of
own and way to carry out the same. They should identify current skill gap in regular manner
while working in an organisation (Cheng, 2012). This would help in determining the requirement
of development plan so that an individual can exceed their professional abilities. When a person
outlines own limitation then and confines own knowledge and expertise then it will help in
performing assigned duties more appropriately. It also assists individuals to behave in
professional manner at workplace with colleagues. By behaving in friendly manner but not
become friends with other workers, helps a person in maintaining own dignity and respect in
eyes of them.
TASK 3
3.1 Authorities and internal departments where suspected illegal acts or other malpractice are
reported
A system whereby suspected illegal and malpractice should be reported, gives an
organisation an important tool to take actions against such situations (Mohajeran, 2014). Since
every professional who is working in an organisation are mostly expected to display loyalty and
discretion towards business. Therefore, under such situation when they find suspicious activities
in business then it arise confusion and difficulties in front of them to reveal the same or not. In
this regard, it is believed that corporations must establish guidelines whereby employees feel
able to report malpractice and any illegal kind of activities to related authorisers. In context with
Barclays, this bank believes that sloppiness in suspected malpractice, may create a huge loss both
for employees and business's concerned. Therefore, to deal with such situations, its employers
have provided a clear guidelines to employees and give proper information about Fraud and
Money-laundering officer.
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3.2 Action to take in instances when requests for work are beyond the employee’s competence
Suspected malpractice, illegal and ethical activities when found in a company then it
majorly destroys its reputation at marketplace (Hannafey and Vitulano, 2013). Thus, in this
regard, it is necessary for organisations to establish a clear guidelines which entail workers
where they can be disclosed such information before reporting to external agency. For this
process, it is important for Barclays to treat such complaints of suspected malpractice and
unethical activities with due care. It can be established by drawing up a proper reporting
procedure. It includes a certain code of standard that revealing such information by employees
to internal departments will not impact on their job role. Along with this, through clearly defined
reporting procedure about malpractice, make ensure to employees that their complaints will
report to right corporate officer. They will further take necessary actions to resolve such major
issues.
3.3 How to report inappropriate behaviour of client
Inappropriate behaviour of clients can be stated in terms of aggressive or abusive
behaviour, spreading malicious rumours about business or employees, offensive comment or
unwanted physical contact, isolation and more. Therefore, any employee when found itself under
such condition then they can report the suspected malpractice to higher authority within
company. These authorisers are held accountable for resolving such alleged malpractices.
Method of reporting: Employees who face inappropriate behaviour of clients are
required to review the company's handbook first. This would help in determining if such kind of
behaviour they observed is prohibited or not. For this process, management of Barclays used to
conduct private meeting with employees on regular basis to discuss with them about such
activities. In this process, workers are needed to carry documentation about suspicious activities
so that necessary actions can be taken.
3.4 Internal and external procedures to be followed for stopping illegal and unethical practices
In order to stop illegal and unethical practices, an individual can adopt the concept of
Whistle-blowing (Harfield, 2012). It can be defined as code of conduct under which an employee
or whistle-blower can discloses unethical or suspected activities to external parties. Such process
can brought a financial loss or other kind of damages for a company where such kind of
activities have happened. Therefore, a whistle-blower's relationship with colleagues may lead to
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dismissals or other form of disadvantages. But it will help in stopping malpractice or unethical
activities also where internal departments of a company fails to take appropriate actions.
3.5 Strategies used to prevent ethical conflicts
Without ethics within a business, an organisation's internal processes as well as external
dealing could not be handled in desired manner (Stappenbelt, 2013). Generally an ethical conflict
occurs at workplace when decision made by other workers are observed as unethical. Therefore,
to prevent ethical conflicts, management of Barclays have adopted a two-sided approach. It
includes provide training to workers and educate them about ethical conflicts. While second one
is to give recruitment to effective leaders who influence people to make effective decisions that
hold ethics.
TASK 4
4.1 Importance of an ethical approach to sustainability
Sustainability refers to an important concept within business which has to be achieved by
introducing ethical approach. It states business to concern on three main aspects that are
economical behaviour, social equity and ecological health. While establishing code of ethics, it is
necessary for organisations to concern on benefits of employees, employers, customers and all
stakeholders. This would help in getting support of stakeholders in running business successfully
in ethical manner. By setting clear guidelines, employees can perform their roles and
responsibilities more appropriately.
4.2 Responsibilities of finance professionals in upholding the principles of sustainability
Professionals dealing in finance sectors perform various responsibilities in upholding the
principles of sustainability. It includes creating and promoting an ethical-based culture which
reducing illegal activities (Sadowski and Thomas, 2012). Financiers must raise awareness of
social responsibilities by investing adequate amount of funds in CSR activities. They are also
required to promote sustainable practices by treating employees equally with respect and dignity.
CONCLUSION
It has concluded from this assignment to run business successfully, it is necessary for
every organisation to establish specific code of ethics. By setting certain rules and regulation, a
company can give safe working environment to workers. Apart from this, code of conduct and
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ethics also give authority to employees to reveal information about suspicious activities to
internal and external agencies.
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