Professional Ethics in Accounting and Finance: A Comprehensive Report

This report provides a detailed analysis of professional ethics within the accounting and finance sectors, using Starbucks as a case study. It begins by defining professional ethics and outlining fundamental principles like integrity, objectivity, and confidentiality. The report then explores the legal, regulatory, and ethical requirements affecting the field, including civil and criminal laws, compliance, and codes of practice. It highlights the roles of professional bodies like CIMA and ICAEW. Furthermore, the report explains the importance of operating within codes of conduct and the risks associated with improper practices, such as money laundering and terrorist financing, emphasizing the need for vigilance. The report also discusses opportunities for maintaining knowledge of changes in regulations and practices. Task 2 focuses on ethical behavior with clients, colleagues, and suppliers, the importance of objectivity, and adhering to organizational and professional values. Task 3 covers reporting unethical behavior, and strategies to prevent ethical conflicts. Finally, the report concludes by examining the importance of ethical approaches to sustainability and the responsibilities of finance professionals in promoting sustainability.

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 that Affect Accounting and Finance Sector. .2
1.3 Role of Professional Bodies in Accounting and Finance Sector...........................................2
1.4 Explain the Reason of Individuals or Organisations are Expected to Operate Within Code
of Conduct and Practice..............................................................................................................3
1.5 Risk of Improper Practice to Organisation and Importance of Vigilance.............................3
1.6 Opportunities for Maintaining Knowledge of Change to Regulation, Practice and
Legislation that Affect Accounting and Finance Sector.............................................................4
TASK2.............................................................................................................................................4
2.1 How to Act Ethically when Working with Clients, Colleagues, Suppliers and others.........4
2.2 Importance of Objectivity and Maintaining Professional Distance Between Personal Life
and Professional Duties...............................................................................................................5
2.3 Importance of Adhering to organisational and Professional Values, Code of Practice and
Regulations..................................................................................................................................5
2.4 Importance of Organisational Policies for Handling Clients Monies...................................5
2.5 Identification of Circumstances when Confidential Information should be Disclosed........6
2.6 Importance of Working Within Limits and Confines Professional Experience and
Knowledge..................................................................................................................................6
TASK3.............................................................................................................................................7
3.1 Relevant Authorities and Internal Departments to Unethical Behaviour, breaches of
confidentiality and other malpractices........................................................................................7
3.2 Appropriate action when request for work are beyond the employees competence.............7
3.3 Identify inappropriate client behaviour.................................................................................7
3.4 Internal and external reporting procedure.............................................................................7
3.5 Strategies that are used to prevent ethical conflicts..............................................................8
TASK 4............................................................................................................................................8
4.1 Importance of Ethical Approaches to Sustainability.............................................................8

4.2 Responsibilities of finance professionals in principles of sustainability..............................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Professional ethics is a name which given to the standard of personal and professional
behaviour and guiding values and principles which are accepted professionally. It is a form of
behaviour at workplace which helps to provide benefit in career and improve the chances of
future success (Bailey and Burch, 2016). When the behaviour of professional is ethical then it
make positive environment which increase productivity and efficiency of employees. This report
is based on Starbucks which is a type of coffee shop industry. It was founded in 1971 by Jerry
Baidwin. In this report there is a discussion about principles of ethical working, understanding of
ethical behaviour while working with external and internal customers. Apart from this, ethical
codes and ethical responsibility of accounting and finance professional in promoting
sustainability will discuss.
TASK 1
1.1 Fundamental Principles of Ethical Behaviour
Ethics is concern with what is right or good in any social situation. Ethical behaviour
make society better and treated everyone equally. It is field of social research which desire to
interpret that how an individual behave when confronted with ethical dilemmas. It is a type of
behaviour which is good in term of society and personal as well as professional life. It build the
customers loyalty in organisation and retain good employees.
Principles of Ethical Behaviour Integrity- It refers that a person should have doing right thing whether anyone watching
or not. Ethical behaviour is not depend on education, rich or talent of a person. It believes
that people have to be honest with everyone. Objectivity- It is a fact which is based on perception of a person which is independent and
not influenced by others (Burgess, 2016). Professional and Technical Competence and Due Care- It maintain professional skills
and knowledge which ensure that client receive receive competent services which is
based on development in legislation and practices to applicable with professional and
technical standard. Confidentiality- In business and professional relationship it is necessary to confidential
of any information and not to disclose such information in front of third parties.
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 Professional Behaviour- It follow relevant laws and legislations and avoid those actions
which are not ethical.
1.2 Legal, Regulatory and Ethical Requirements that Affect Accounting and Finance Sector
There are some laws and ethical requirements which affect finance and accounting sector.
These are as follows:- Civil Law- This law is made for protect the private rights of citizens and govern their
private matters. It is separate from criminals and political matters. It affect accounting
and finance sector because people are not disclose their documents for verification. Criminal Law- It is related to the crime such as threatening, endanger and harmful
situation arises in safety, property and moral welfare. If there is any fraud arises in
company then it affect the accounting department on transaction records and budget
planning (Cox, Bachkirova and Clutterbuck, eds., 2014). Compliance- There are so many rules and regulations but some are prominent legislation
which are important for organisation. There is a need of funds to detect any problem
arises in firm which affect finance sector.
 Code of Practice- It is a document which provide practical guidelines about how to
comply with legal obligations for better health and safety and make ethical environment
in organisation. It was published by government for occupational health and safety
regulation and ethical code of practice. If there is no proper environment is made for
finance and accounting sector then they can't concentrate on their work.
1.3 Role of Professional Bodies in Accounting and Finance Sector
There are different roles of professional bodies in finance and accounting sectors which
are as follows:-
Chartered Institute of Management Accountants (CIMA)- It is the world's largest
professional body of management accounting. The regulative body are committed to promoting a
great level of ethical standards and professional are play an important role in accounting and
finance sector (Farahani and et. al., 2015).
The Institute of Chartered Accountants in England and Wales (ICAEW)- The ICAEW
is a founded by the Royal Charter in 1880. it is a professional membership administration which
have aim to promote and maintain huge standard of professional conduct and practices in finance
and accounting sector.
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Accounting and finance expert professionals are play an important role in business,
financial institutions, protect the interest of public, promote professional accountants and growth
in financial sector of a nation.
1.4 Explain the Reason of Individuals or Organisations are Expected to Operate Within Code of
Conduct and Practice
Code of practice refers to a practical guide which assist to follow rules and regulation
regarding health and safety (Frazer, 2016). It deals with a specific issue and cover everyone from
the risk arises in a firm. Individuals and organisation are expected to operate their task within
code of practices because it support social, political and economical integrity by employees. It
protect the employment and potential customers in supporting services. It also provide equal
opportunity to all types of employment.
Code of Conduct refers to a set of social norms, proper practices and religious rules to
enhance the standard of behaviour of an organisation. Organisation and individuals want to
operate in code of conduct because it support employees in day to day decision making and
clarify principles and mission of organisation.
1.5 Risk of Improper Practice to Organisation and Importance of Vigilance
Operational Risk
It is a type of risk which change in value cause by fact of actual losses is differ from
expected losses (Goodall, 2014). It include different types of risk such as privacy protection,
fraud, security and legal risk etc. Three types of risks practices in organisation improperly are as
follows:- Money Laundering- It is a process of creating a large amount of money from criminal
activity and increase profit from illegal activities. It create a risk for organisation and
their business activities are run improperly due to this. Terrorist Financing- It is a illegal activity which provide fund for terrorist activity.
Funds are raises from different sources such as charitable organisations, personal
donation, smuggling of weapons etc. It make business practices improper and create risk
for organisation.
 Due Diligence- It is an investigation of products and investment and review the financial
records. It is also investigate the transaction between buyer and seller. It create risk for
company to deeply investigate regarding customers, brokers and equity analysts.
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Importance of Vigilance
Vigilance is an quality to keep attention and watchfulness on organisational activities
over a period of time. It is important for an organisation to keeping a watchful eye on
organisational activities and actions done by employees. It encourage ethical practices and
ensure honesty and integrity in official transaction.
1.6 Opportunities for Maintaining Knowledge of Change to Regulation, Practice and Legislation
that Affect Accounting and Finance Sector
When a person maintain and up to date their knowledge with changing regulations,
legislations and practices made by government or organisation then affect finance and
accounting sector and create opportunities to promote transparency and accountability of actions
and decisions of government (Hensel and Laux, 2014). It recommend good practices and provide
information issues and requirements or management and accounting records. When a person
have proper knowledge of changing practices then they will maintain their data and records
without any error. Rules and regulation regarding criminal activities, fraud etc. are also provide
opportunity to detect these frauds from and organisation and positively affect accounting and
finance sector because they can easily records data and forecast accurate return on investment.
TASK2
2.1 How to Act Ethically when Working with Clients, Colleagues, Suppliers and others Professional Behaviour- A person have to work ethically while work with colleagues,
clients and others in an organisation. They have to behave professionally and ethically.
They need to analyse that how to treat clients and co-workers and positive attitude at
workplace. It enhance productivity and efficiency of employees. Threats of Ethical Principles- Fundamental principles of ethics includes integrity,
objectivity, professional behaviour, confidentiality and other (Macfarlane, Zhang and
Pun, 2014). It is a responsibility of every person to follow these principles and behave
ethical with clients and co-workers.
 Safeguarding- This term is used in UK to measure and protect the rights of individual
and live life which is free from harm and abuse. When all the employees are work in a
team then they have to protect the rights of each other and done not give abuses and harm
to their suppliers and others.
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2.2 Importance of Objectivity and Maintaining Professional Distance Between Personal Life and
Professional Duties
Objectivity is important at marketplace decision making process and making fair
decisions in concern with company and employees problem. It eliminate the decisions which are
based on personal judgement, and cultural differences. It is based on perception of individual
which cannot be influenced by others.
It is important to maintain professional distance between personal life and professional
duties because it helps in increasing efficiency in job and reduce stress in personal life. At
workplace person should avoid to check personal mails, voice mail to family member (May,
Luth and Schwoerer, 2014). They also need to avoid personal matters and private conversation at
work place. On the other hand, people can save private conversations with co-workers for
breaktime. After office, they need to sped time with family and friends who are not their clients
and co-workers.
2.3 Importance of Adhering to organisational and Professional Values, Code of Practice and
Regulations
Importance of Organisational Values- Organisational values are accepted by those
people who form their particular manner of behaviour in both social and personal life of a
person. It can change with social and personal maturity. Employees can develop their own value
which determine the course of their life in organisation.
Importance of Professional Values- professionals are set the values under a
philosophical framework which include a interest for democracy, inquire and being helpful. They
want to make collaboration and trust to create an environment in which they give value to those
person who have problem solving skills and enhance the self control over employees of firm.
Importance of code of practices- It is important to make relation between society and
consumers (Molofsky, 2014). It also represent their competencies and skills in provision of
employment support services. It promote privacy, health, dignity and safety to every person. It
accurately promote the working ability of a person by values and philosophies.
Importance of Regulations- Regulations are important in formatting the welfare of
society and economy. Main objective of regulations is to assure that rules are work effectively in
order to get public interest.
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2.4 Importance of Organisational Policies for Handling Clients Monies
Importance of organisational policies are as follows:-
Bookkeeping- It is an important organisational policy to handle or manage the client
money by keeping all the transactions and records and billing the account receivable and account
payables (Pope and Vasquez, 2016). It is policy does not going on correctly then business will
not get profit. Starbucks have to make policy regarding insurance claim filing, billing, check
depositing and credit card balancing to identify the accurate money of client.
Record management- This process is encompasses different tasks from entering of client
into organisation to exit from the firm. All the records regarding selling and purchasing of goods
and services should be recorded in proper manner.
Appointment scheduling and calendar management- It is important to keep schedule
joining the firm by employees and working hours at workplace. Policies are also important to
handle the money of clients because when all the transactions are properly recorded as per
mentioned in policy then it become easy to handle monetary transactions.
2.5 Identification of Circumstances when Confidential Information should be Disclosed
There are some situations in which confidential information should be disclosed. These
are as follows:-
 Confidentiality is a type of trust between patient and doctor and it is important part for
better care.
 There are some situations arises in organisation related to criminal and fraud activities in
which confidential information need to be disclosed in front of every employees to warn
them and aware them about unethical circumstances which create issues in organisation.
2.6 Importance of Working Within Limits and Confines Professional Experience and Knowledge
It is important for employer and employees to perform their task effectively and within a
limit by making the ethical behaviour (Spence and Carter, 2014). They should follow rules and
regulations made by government and policies made by organisation. When every person is
behave ethically and follow the rules and regulations then it enhance the standard of an
organisation. It also helps to protect principles and ethics of counsellors and clients. It include
confidentiality, book keeping and transactions.
Professional knowledge and experience are important for an organisation because they
are helps to encourage employees to perform task in effective and efficient manner. Professional
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experience of a person provide them better opportunity to develop their career and make
strategies by using of their past experience and present activity. Knowledge of a person is a
factor of motivation for a person through which they can generate new ideas which are beneficial
for an organisation.
TASK3
3.1 Relevant Authorities and Internal Departments to Unethical Behaviour, breaches of
confidentiality and other malpractices
There are some top authorities, teams and departments who are made to prevent unethical
behaviour, breaches of confidentiality and other malpractices arises in organisation. If there is
any unethical behaviour done with any employee then they can report it to top managers of
organisation or health and safety department have right to handle such kind of issues (Stuart,
Stuart and Pedersen, 2014). A proper team should be made in organisation who is listen the issue
of employees and after finding the causes of problems they need to find out solution of the
issues. Top managers, board of director, safety and security etc. are the authorities and
department where unethical behaviour can be reported.
3.2 Appropriate action when request for work are beyond the employees competence
When employee get any difficult task from clients and which is beyond their ability then
they report it to internal parties such as their managers, supervisors and co-workers. In this
situation, top manager will helps them to performing task. They give motivation and provide
training to them regarding difficult performance. But if there is no any solution is get from
internal authorities and department then they will report to external parties and get appropriate
action regarding their issues.
3.3 Identify inappropriate client behaviour
There are some inappropriate behaviour of client is comes in many forms which may
create risk on safety and health of an employee. Inappropriate behaviour of client can be
identified by the following ways: verbal abuse, physical or emotional violence, disruptive
behaviour, abusive or aggressive behaviour, harassment or discrimination and unseasonable
demand of products and services. These are the sign of unethical behaviour of client. It can
report in board of director of company, complain to related authority or report to police or court
of law.
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3.4 Internal and external reporting procedure
When employee suspect an employer, colleague or client and an act is believed to be
illegal or unethical then the internal and external procedure is as follows:-
 Documentation of illegal and unethical behaviour done by employee which include time,
date, supervisors and manager present.
 Witnesses and proofs are collect which include email, voice mail and other sources which
can be gathered as a proof (Swanson and Frederick, 2016).
 Unethical behaviour is ensure by the discussion of co-workers and managers.
 Report to supervisor regarding unethical or illegal behaviour.
 Report is written against the employees and take strict action against them.
External procedure of reporting is that to after getting the evidence of illegal behaviour, report
should be done in police station or to related authority.
3.5 Strategies that are used to prevent ethical conflicts
There are some strategies which are used to prevent ethical conflicts at workplace which
are as follows:-
 Set workplace and conflict guidelines means the guidelines regarding conflicts should be
made which set on working environment and third party should immediately address and
prevent the conflicts.
 Managers should be trained as mediators they should have efficiency to handle the
conflicts. They need to analyse the situation and listen both the parties then take
corrective action to prevent ethical conflicts.
 Gender biasses should be eliminated in organisation because it a major of ethical conflict.
When this difference is eliminated then automatically ethical conflict will prevent.
TASK 4
4.1 Importance of Ethical Approaches to Sustainability
There are basically five approaches of ethics such as utilitarian approach, fairness and
justice approach, the rights approach, virtue approach and the common good approach. These
approaches of ethics helps an organisation to sustain long term in market. These approaches are
important because they produces great balance between good and harmful situations. Right
approach provide the respect and protection the moral rights of employees. Justice approach is
contribute the idea of treated equally in firm. Common good approach suggest that relationship
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of society is interconnected with ethical reasoning. These approaches are helps to make better
decision in organisation which enhance the chances of sustainability of organisation long run in
market (VASEGH and et. al., 2014).
4.2 Responsibilities of finance professionals in principles of sustainability
Responsibilities of financial professionals in principles of sustainability are as follows:-
 Finance professionals are make budget for performing organisational activities and
analyse the lack of resources which need for production.
 Finance professionals are take the initiative and find out that where data collection,
process and reporting skills can be of use for sustainability of organisation.
 They are also responsible for making decisions regarding analysis of profit and cost.
 They invest the fund of organisation in different sources where company can get
maximum return. It helps to increase profitability and sustainability of an organisation for
long time period.
CONCLUSION
From the above mentioned report it can be concluded that there are different types of
principles of ethics which helps to behave in good manner with every person. There are some
laws and regulations made by organisation and government which should be followed by
everyone. A proper distance should be made between personal and professional life of a person.
Organisational policies are important to handle clients money. Sometimes, situations are created
where confidentiality need to be disclosed. Ethical approaches are important for sustainability in
market for long time and there are some strategies which are used to prevent ethical conflicts in
organisation.
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