Ethics in Accounting and Finance

CH6. Ethics in Acounting Accounting and and finance. firance. 2-4M vod tame Overvieco Meaning Why al ethics FAT in Alking behave. 5 principles. Threat How to for FAPA to handle FAPA threat unethically Concept 1 Meaning of ethics in alking & finance: (a) It means taking decision about account & finance by following the principals of 4 - integrity (honest) of Objectivety (unbiased). Confidentiality. (secrecy) etc. Concept 2: Causes/Reasons of unethical behaviour. on the part of FAPA: following are the causes / Reanons due to which pinance & accounting professionals. behave unethically: 10) focus on short term sepult IF a businessman wants to just make short-term benefits, then it maly engage in books & accounts. funification of (6) Overlooking Small unethical lapses 8 It means ignoring the small unethical protems in the organisation 1. fconomic - cycle: every The business has its ups & downs. owner of business forces the. FAPA to give good financial results, dusring the downfall of the business. W.Compile Accounting Rules Jin the Due to change SA (stds on auditing) alcing Mules As, the ateing accountant is force to behave unethically Imt 5 fundamental principal toto pinance & accounting 5 principles for FAP principles of principles ay Lit star. Competence, pro-behavins it means the It means FAP shall the FAPS always remains must upto late. apply & clevelope the rules their know principles fintegrity as pere this principal FAP, must Hanest straight porward while perpar ming his ore Fessional chaty principles of objectivity A FAP must make decision the basis his fional judgement simply making ethics sielating principlese Confidentiality, It means the FAPA on shall not of disclose profes-the secret of his cléent, . untill it is while allowed by law ar Act, stepul ation -ledge.. competence notification. दधता कुशलता while puforming decision FAP shall not be bigned. approved by client his duties Corrept 4. Threats to EAPS Financial & alcing properysi 20 A FAPs can works as an employee or the professional in an organisation. In both gole threats → a CA/FAP, has to pace pollowing 4. self. Interest threat:→ This threat arise, When an accountants has either himself financial Interest or his close family member. has financial Interest in the organisiahon, eg. When thereel eg ol is also share-holder FAP 2. ser-review threat This threat arise, When a FAP has to check. marm his own worth Aeg. An accountant who makes entry in prom receipt book is Pally reviewing the Total entry with receipt book. 3. Advorcicy threats. This threat arise, when A FAP has to perform more than 1 role. This threat dearises when there in conflicts between the different roles af professionals Alhen a FAP is also required to I sell the shares of the 10. Here there wil be conflict between the duties 4 sells executive.. as a FAP 4. Familiarity threats→ This threats arise, when a FAP, is familiar to the top level management. Here the professional behaviour al FAP is affected due to close relation. 5. Intimidation-threat: Inthen the employer/organisation 15 threaten the FAP, Pros por removing his job/employment, then it is called "saltimid. -ation threat! rept 5 Guideline for bandling of threats :- safeguard against threats. ssafeguard created by propension/Labl A FAP shall consult the Act rules repulat -lon while dealing with threat. Safeguard in work environment ↓ Also consider the organisation alates of while dealing with threat. eg. to Internal control. • ethical leadership