Acca Professional Ethics Module Essay

Morality is a set of rules concerning right and wrong behaviour. Ethics is the branch of philosophy that attempts to provide clear arguments about which moral rules are best and how those rules ought to be interpreted. There are several different ethical theories or frameworks for ethical decision-making, each of which has been advocated by prominent moral philosophers. Some philosophers, for example, advocate thinking about ethics entirely in terms of consequences: what action will produce the best outcomes overall?

Others have argued in favour of thinking solely in terms of duties, and absolute principles of behaviour – such as ‘Always tell the truth’ – that could be adhered to by all. Still others have advocated thinking about ethics in terms of hypothetical contracts, asking us to imagine what rules of behaviour reasonable, unbiased people would agree society should live by. And finally, some have argued that we ought not to think about ethics in terms of rules, but rather to think about what kinds of virtues good people embody, and what kinds of people we think it best to emulate.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

Many different factors affect ethical reasoning, including age, sex, religion, and professional affiliations. It is preferable that your ethical decisions be based on good reasoning and careful consideration of the relevant laws and principles, but it is also necessary to be aware of the various personal factors affecting your own decision-making, and those of other people. One of the differences between the two approaches is that in a rules-based approach, you look for a rule that prohibits you from doing whatever it is you are considering.

In a principles-based approach, you have to think more widely and consider whether or not a principle is being violated or even threatened. In many ways the principles-based approach is more reliable in that if an action is planned, its appropriateness is assessed. If it goes against the principles of professional behaviour and values, then the action should be avoided, even if no rules exist concerning this specific action. Another difference is the onus of responsibility. In a rules-based approach, someone in authority has to create a list of prohibited activities for you to obey.

In a principles-based approach, the responsibility is on you, as a professional, to decide if, in each specific case, a principle is being violated. It is difficult to have a written rule that covers every possible situation. Furthermore, in a rules-based approach, people sometimes start looking for loopholes. They look for situations that are not prohibited and use them to their advantage. This is what happens in taxation where tax rules are established but accountants look for loopholes in order to avoid tax. A principles-based framework is a more flexible approach, and can cover new situations that might not have been thought of.

It can sometimes seem more difficult, however, because you need to carefully think through every situation. ACCA’s fundamental principles: •Integrity •Objectivity •Professional competence and due care •Confidentiality •Professional behaviour As a human being, you and your ethics are shaped by your upbringing and your experience. As a professional accountant or student accountant, you are bound by the laws of your country, and all regulations that flow out of them. As an ACCA member, student, or affiliate, you are also bound by the fundamental principles of ACCA. Section 3. of the ACCA Rulebook contains the full text of these principles. These principles are based on standards from IFAC, the International Federation of Accountants which apply to accountants around the world. What follows is an explanation of these principles. integrity What the rulebook says You ‘should be straightforward and honest in all professional and business relationships. ‘

In other words Do not lie and do not issue false or misleading information. objectivity What the rulebook says You ‘should not allow bias, conflicts of interest or undue influence of others to override professional or business judgements. In other words Your professional and business judgement should be based on fact and on what is in the best interests of stakeholders or others. Judgement should not be based on what is in your own personal interest, or in the interests of those who have power or influence over you. professional competence and due care What the rulebook says You ‘have a continuing duty to maintain professional knowledge and skill at a level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques. ’ and Members should act diligently and in accordance with applicable technical and professional standards when providing professional services. ’ In other words Only perform work if you are competent to do so. Keep up to date with accounting matters.

Do not forget that as an ACCA member, you will have continuing professional development (CPD) responsibilities – and you must ensure that you are keeping up to date. confidentiality What the rulebook says You ‘should respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such nformation to third parties without proper and specific authority or unless there is a legal or professional right or duty to disclose. ’ and ‘Confidential information acquired as a result of professional and business relationships should not be used for the personal advantage of members or third parties. ’ In other words Do not talk about your clients, or use information that you have learned about them for your personal gain or for the gain of others. Maintain your silence even after the professional relationship with the client ends. professional behaviour

What the rulebook says You ‘should comply with relevant laws and regulations and should avoid any action that discredits the profession. ’ In other words Be courteous and considerate to people, and always behave so that a ‘reasonable and informed third party’ who knows all the facts would also think you are acting professionally. The ACCA framework is based on the model from the International Federation of Accountants (IFAC). It consists of a series of steps that you go through when confronted with an ethical dilemma. You should ask and answer these questions in this order:

1. What is the real issue here? You are the accountant at a pharmaceuticals company. Your finance director asks you to contact the marketing director about the implications of a significant and unexpected price increase of a generic drug you produce for thinning the blood in heart patients. The request follows a pricing agreement drawn up between the three main companies supplying these drugs to the national health service of a country, and so the impact of the price increase on the volume of sales will be lessened, due to the other companies in the cartel also raising their prices.

Is this your problem? You might think ‘no’, because you have not been involved in the company’s decision to fix the drug price, nor brokered the agreement with its main competitors. On the other hand it could be your problem, since doing this could be seen as condoning a potentially illegal arrangement. If not strictly illegal, the agreement could be considered to be unethical as it is detrimental to the tax payers of the country who finance the national health service through taxation.

Is being asked to discuss the price increase with the marketing director the real problem? No. It is part of a larger problem – namely coming into possession of knowledge of a wider conspiracy of a serious nature, in other words, that a cartel is being operated and that price-fixing is taking place which you are being asked to help implement. The problem you face is that if you go along with it you are aiding and abetting an illegal process, or if you do not go along with it there may be career implications or other problems for you in the future.

Is this a real problem or am I avoiding a difficult task? The problem certainly exists in this case, but rather than just helping to implement the price change and ignoring the wider issue, or refusing to do so, you should sit down to discuss the larger problem with the finance director. You should try and establish the reason for the price-fixing arrangement and question its legality as well as its ethics. If the situation gets difficult, there may be a need for you to find out more about your options.

Where you feel pressured to act against your professional judgement or feel you should act on information that you have about illegal or unethical behaviour, you might need to discuss this with your solicitor or your professional accounting association. You may need to consider alerting appropriate authorities about this arrangement, in other words to consider the act of ‘whistleblowing’ and all its wider implications for you, your organisation, and its stakeholders. 2. Are the fundamental principles threatened? Sources of threats The threats to these principles can come from a number of different directions. Self-interest threats

These come about if you or a close family member stands to gain (or not lose) something from the incident. Usually your integrity or objectivity would be at risk. Self-review threats These may be significant when you are in a position of having to review your own work. This could put your objectivity at risk. Advocacy threats These threats exist if you are promoting a position that compromises your integrity, or promoting a position or opinion to the point that subsequent objectivity may be compromised. Familiarity threats These can arise if you have a close personal relationship with someone and cannot be objective.

Several of the fundamental principles may be threatened. Intimidation threats These can become significant if you put yourself in a position where you could be pressurised by physical or verbal threats, or if there is an implied threat to your career or prospects. For example, you may be bullied into doing work which you are not competent to perform. Any of the principles could suffer under this type of threat. 3. Is the threat significant? 4. Are there safeguards that can eliminate the threat, or reduce it to an acceptable level? ACCA has a framework for ethical decision making.

It consists of four steps. First you determine the real issue. Then you determine if any of the fundamental principles are threatened. Next you determine if the threats are significant. And finally you see if you can put safeguards in place. You should think of ACCA’s fundamental principles as your professional ethics. As an accountant you have an obligation to the public, as do other professionals, and the obligation consists of upholding those fundamental principles. It is important to know yourself and your ethics, so that you are better able to distinguish your personal ethics in a business situation.

x

Hi!
I'm Eric!

Would you like to get a custom essay? How about receiving a customized one?

Check it out