INTERNATIONAL FEDERATION OF ACCOUNTANTS

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International Federation of Accountants
Code of Ethics - An overview Jan Munro, Senior
Technical Manager
REPARIS Workshops on Accounting and Audit
Regulation Vienna, Austria March 14-15, 2006
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Code of Ethics

• Part A framework applies to all professional
  accountants
• Part B professional accountants in public
  practice
• Part C professional accountants in business

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Conceptual framework

• Requires active consideration of issues
• Can be applied to differing circumstances
• Responsive to rapid change
• Establishes basic principles
• Rules approach can encourage literal
  interpretation

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Fundamental Principles

• Integrity
• Should be straightforward and honest in all
  professional and business relationships\
• Fair dealing and truthfulness
• Accountants should not be associated with
  information that is false and misleading

5
Fundamental Principles (contd)

• Objectivity
• Should not allow bias, conflict of interest or
  undue influence of others to override
  professional or business judgments
• Should avoid relationships that bias or unduly
  influence professional judgment

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Fundamental Principles (contd)

• Professional Competence and Due Care
• Professional knowledge and skill at level
  required to ensure competent services
• Attainment and maintenance of professional
  competence
• Continuing professional development

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Fundamental Principles (contd)

• Professional Competence and Due Care
• Act diligently in accordance with applicable
  technical and professional standards
• Those working under accountants authority should
  have appropriate training and supervision
• Accountant should make clients, employers or
  other users of professional services aware of
  limitations inherent in services to avoid
  misinterpretation of an expression of opinion as
  an assertion of fact

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Fundamental Principles (contd)

• Confidentiality
• Should not disclose confidential information
  acquired as a result of professional/business
  relationship without proper authority to disclose
  unless professional right or duty to disclose
• Disclosure is permitted by law and is authorized
  by client or employer
• Disclosure is required by law
• Professional duty or right to disclose

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Fundamental Principles (contd)

• Confidentiality
• Should not use confidential information for
  personal advantage or advantage of third parties
• Confidentiality to be maintained even in a social
  environment
• Need to comply with principle continues even
  after the end of the professional relationship

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Fundamental Principles (contd)

• Professional behavior
• Obligation to comply with relevant laws and
  regulations and avoid any action that discredits
  the profession
• Should not make exaggerated claims for services
  they are able to offer, qualifications they
  possess or experience they have gained
• Make disparaging references or unsubstantiated
  comparison to work of others

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Framework Threats and safeguards
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Threats

• Self-interest
• Self-review
• Advocacy
• Familiarity
• Intimidation

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Safeguards

• Professional, legislativeor regulatory
• Within the work environment

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Part B Professional Accountants in Public
Practice

• Professional appointment
• Client acceptance
• Engagement acceptance
• Changes in appointment
• Conflicts of interest
• Second opinions
• Fees and other types of remuneration
• Contingent fees
• Referral fees

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Part B Professional Accountants in Public
Practice

• Marketing professional services
• Gifts and hospitality
• Custody of client assets
• Objectivity all services
• Independence assurance engagements
• Financial Interests
• Family and personal relationships
• Long association of personnel
• Non-audit services

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Part C Professional Accountants in Business

• Potential conflicts
• Preparation and reporting of information
• Prepared in accordance with relevant standards
• Should not be associated with misleading
  information
• Acting with sufficient expertise
• Financial interests
• Inducements

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Code of Ethics

• www.ifac.org