IFAC and APB: Ethical Standards for Accountants

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The International Federation of Accountants (IFAC) provides professional ethics and ethical codes for Accountants. They include standards of behaviour that are designed for both practical and idealistic purposes. In the accountancy profession, professional accountants should follow a set of rules and values to be able to execute the objectives needed to the highest standard of so called professionalism. IFAC requires throughout the world that accountancy bodies should issue codes of conduct not less rigorous than its own. Members are required to examine the spirit of the code as well as the specific requirements. Disobedience can lead to disciplinary proceedings. More specific guidance is included in the codes for accountants engaged in providing independent audit and assurance services. In the United Kingdome and Ireland auditors follow ethical guidance from International Standards on Auditing ISA (UK+I) that is published by the Auditing Practices Board (APB). The APB’s Ethical Standards are also similar in principle to IFAC’s code. (book)

APB Ethical Standards are concerned with the integrity, objectivity and independence of auditors and the most important types of potential threats that could influence these values. Independence is the foundation of the auditing profession. The primary objective of auditors is to ensure that the financial statements prepared by the directors are correct and to provide independent assurance to the shareholders that are indeed prepared correctly. The auditor then issues a report, which includes an opinion as to whether the financial statements give a true and fair view. As a result, shareholders can make their decisions in the Annual General Meeting. Without independence, auditors lack impact an...

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...e appetite for money lays in the unconscious. Also the need for social relationships that could turn friendly is one of the Maslow’s hierarchy of needs. Even the most honest, goodhearted auditors will be seduced in the opportunity to “cook” the books for a friend and hide the company’s true financial statements in gain for privileges. Indeed in the matter of non-audit services and “extended assurance” the appetite for large amount of fees is the motive for breaking values and ethos. Concluding in my opinion the Ethical standards are fine, however revisions should be made when cases rise up in the future. The problem is not the audit profession either its standards, rather those who practise it.

Men at some time are masters of their fates:

The fault, dear Brutus, is not in our stars,

But in ourselves, that we are underlings.

Shakespeare, William; Julius Caesar

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