Ensuring Integrity, Objectivity, And Professionalism
Ethics are the cornerstone of professional conduct, guiding individuals in their behaviour and decision-making processes. In accountancy, these moral principles are at the top, ensuring that professional accountants adhere to high standards of integrity and professionalism. The Code of Ethics for Professional Accountants delineates the core values and principles essential for maintaining trust in the profession by businesses, governments, and other organizations. By upholding these ethical standards, accountants contribute to the reliability and credibility of financial reporting, assurance, auditing, and other critical activities, reinforcing public confidence in their expertise and judgment.
Ethics are moral principles that govern a person’s behaviour or the conduct of an activity. Professional ethics are fundamental to the practice of a profession. The Code of Ethics for Professional Accountants establishes values, principles, and standards to guide the conduct of accountants. Confidence in the accountancy profession is a crucial reason businesses, governments, and other organizations rely on professional accountants across various areas, such as financial reporting, assurance, internal and external auditing, corporate reporting and other professional activities. Accountants recognize that this trust is rooted in the skills and values they bring to their work, including commitment to ethical principles and professional standards, utilization of business acumen, application of technical expertise and knowledge in other relevant areas and exercising sound professional judgment.
International Ethical Standards Board for Accountants (IESBA)’s The International Code of Ethics for Professional Accountants (including International Independence Standards) (“the Code”) sets out fundamental principles of ethics for professional accountants, reflecting the profession’s recognition of its public interest responsibility. These principles establish the standard of behavior expected of a professional accountant. The fundamental principles are: integrity, objectivity, professional competence and due care, confidentiality, and professional behavior. These are explained as follows:
Integrity mandates that professional accountants uphold honesty and transparency in all business and professional interactions. They must adhere to fair dealing and truthfulness, even when facing pressure or potential adverse consequences. Accountants are strictly prohibited from associating with information they know to be false, misleading, or incomplete, and they must take immediate steps to disassociate themselves from such information if discovered.
Objectivity requires accountants to exercise unbiased judgment, free from conflicts of interest or undue influence. This principle safeguards the integrity of professional decisions, ensuring that external factors do not compromise the reliability and impartiality of the services provided. Upholding objectivity is essential for maintaining the profession’s trust and credibility.
Professional Competence and Due Care compel accountants to continuously maintain and enhance their knowledge and skills, ensuring that their services meet current standards and legal requirements. They are expected to act with diligence and responsibility, delivering precise and thorough work while clearly communicating any limitations in the services provided to clients or employers.
Confidentiality imposes a strict obligation on accountants to safeguard sensitive information obtained through professional relationships. They must prevent unauthorized disclosure at all times, including after the relationship has ended, and ensure that their teams also adhere to these confidentiality standards. However, accountants must recognize that there are specific legal or professional circumstances where disclosure may be required.
Professional Behavior demands that accountants comply with all relevant laws and regulations while conducting themselves in a manner that enhances the reputation of the profession. They must avoid any actions that could discredit the profession and ensure that all marketing and promotional activities are honest, accurate, and do not mislead or unfairly criticize others.
Accountants must be aware of various circumstances that could compromise their adherence to these principles and take appropriate measures to maintain high ethical standards. Professional accountants regardless of their specific role—whether as employees, contractors, partners, or volunteers—are responsible for preparing and reporting financial information relied upon by stakeholders. Their ethical obligations are consistent regardless of their employment status or organizational role, ensuring integrity and reliability in their professional activities.
Accountants are expected to uphold fundamental ethical principles and address any threats that may arise. They are encouraged to foster an ethics-based culture within their organizations by implementing measures such as ethics education, whistle-blowing policies, and compliance procedures. These actions help to prevent violations of laws and regulations and promote ethical behavior.
In cases where threats to ethical compliance cannot be resolved, resignation from the organization may be necessary. Effective communication with those charged with governance is crucial, ensuring that all relevant parties are informed of any ethical issues. This transparency helps to uphold the integrity of the profession and maintain trust among stakeholders.
In conclusion, adherence to the fundamental principles outlined in the Code of Ethics is important for maintaining the integrity and trustworthiness of the accountancy profession. Professional accountants are entrusted with significant responsibilities, and their commitment to ethical behavior—encompassing integrity, objectivity, professional competence, confidentiality, and professional conduct—is crucial for upholding the profession’s reputation. By fostering an ethics-based culture within their organizations and addressing potential ethical threats proactively, accountants not only comply with established standards but also contribute to a transparent and accountable business environment. Should ethical challenges arise that cannot be mitigated, resignation from the organization may be necessary to preserve the profession’s standards and ensure ongoing public trust.
CPA Peter Kibet Kitur is a Tax consultant with Bon and Drew Associates, serves in public sector, is the ICPAK Central Rift Region’s Branch Chairman and a member of ICPAK’s Devolution sub-committee.
