Ethics 4-11

  1. Duties expected of a profession:
    • Competence
    • Objectivity
    • Integrity
    • Confidentiality
    • Discipline
  2. When does a fiduciary relationship exist?
    When service provided is extremely important to the client, and where there is a significant difference in the level of expertise, such that the client has to rely upon the judgement of the professional.
  3. Features of the accounting proffession
    • Fiduciary services to society
    • Extensive knowledge and skill
    • Training and skill are intellectual
    • Overseen by self-regulating membership organization
    • Accountable to government authority
  4. Duties essentail to a fiduciary relationship
    • Continuing attention to needs of client/stakeholders
    • Development and maintenance of required knowledge/skills
    • Maintenance of trust
    • Maintenance of acceptable personal reputation
    • Maintenance of a credible reputation as a profession
  5. Rights permitted in most jurisdictions
    • Ability to hold oneself out as a designated professional to render important fiduciary services
    • Ability to set entrance standards and examine candidates
    • Self-regulation and discipline based on codes of conduct
    • Participation in the development of accounting/audit practice
    • Access to some or all fields of accounting and audit endeavor
  6. Values necessary to discharge duties and maintain rights
    • Honesty
    • Integrity
    • Objectivity
    • Desire to exercise due care and professional skepticism
    • Competence
    • Confidentiality
    • commitment to place the needs of the public, client, profession, and employer before self-interest
  7. Technical imperative
    If something can be done, it should be done
  8. What aspects should be kept confidential?
    Those aspects of the client/employer that you might not agree with, but which may not impact on the financial activities of the company sufficiently to be of concern to the public.
  9. SOX banned these nonaudit services:
    • Bookkeeping
    • Financial information systems design and implementations
    • Appraisal or valuation services
    • Actuarial services
    • Internal audit outsourcing
    • Management function/human resources
    • Broker/Dealer, investment adviser
    • Legal services and expert services unrelated to the audit.
  10. Three situations that would impair auditor independence
    • An auditor cannot function in the role of management
    • An auditor cannot audit their own work
    • An auditor cannot serve in an advocacy role for their client
  11. Credibility
    The critical value added by professional accountants in the newer assurance services as well as the traditional ones.
  12. Kohlberg's Six Stages of Moral reasoning
    • Preconventional
    • 1. Obedience
    • 2. Egotism
    • Conventional
    • 3. Interpersonal concordance
    • 4. Law and duty (social order)
    • Post-conventional, Autonomous, or Principled
    • 5. General individual rights and standards agreed upon society
    • 6. Self-chosen principles
  13. Motives for Kohlberg's stages
    • Self-Interest
    • 1. Fear of punishment
    • 2. Self-gratification
    • Conformity
    • 3. Role expectation/approval from others
    • 4. Adherence to moral codes
    • Interest in others
    • 5. Concern for others and broader social welfare
    • 6. Concern for moral/ethical princple
  14. Sources of ethical guidance
    • Standard setters
    • Commonly understood standards of practice
    • Research studies and articles
    • Regulator's guidelines
    • Court decisions
    • Codes of conduct
Card Set
Ethics 4-11
Ethics quiz