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Ethics and Professionalism “The Integrity of the Upright Shall Guide Them” (Proverbs 11:3)

Ethics and Professionalism “The Integrity of the Upright Shall Guide Them” (Proverbs 11:3) . Learning Objectives. Reflect on the meaning and importance of ethics in personal and professional life Define a profession; differentiate from trade Understand why professionals need ethics

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Ethics and Professionalism “The Integrity of the Upright Shall Guide Them” (Proverbs 11:3)

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  1. Ethics and Professionalism“The Integrity of the Upright Shall Guide Them” (Proverbs 11:3)

  2. Learning Objectives • Reflect on the meaning and importance of ethics in personal and professional life • Define a profession; differentiate from trade • Understand why professionals need ethics • Understand basic ethical standards in the Code of Professional Conduct for CPAs • Learn and practice a process of ethical decision making

  3. Ethics: What is it? • “A discipline of good and evil and moral duty.” (Funk and Wagnalls) • Actions and how they affect people

  4. Where did you get your ethics? • Parents • Religion • School • Peers

  5. Concepts at the heart of ethics • Fairness • Trust • Respect • Compassion • Cooperation “He hath showed thee, o man, what is good, and what doth the Lord require of thee, than to do justly, and to love mercy, and to walk humbly with thy God.” (Micah 6:8)

  6. The Sinking of the Titanic • What were the facts? • Who were the stakeholders? • What were the issues and values? • What were the alternatives? • What actions were taken? • What were the consequences?

  7. When God Comes to Work (managing religious diversity) • Facts? • Stakeholders? • Issues and values? • Alternatives? • Actions? • Check?

  8. The Heinz Dilemma • Facts? • Stakeholders? • Issues and values? • Alternatives? • Actions? • Check?

  9. Ethical problem you faced today? • Facts? • Stakeholders (persons involved)? • Issues and values? • Alternatives? • Action? • Did you check yourself?

  10. What is a profession? • A group of people pursuing a learned art with a common calling

  11. Factors unique to a profession • Common body of knowledge • Formal educational process • Standards of entry • Recognition of public responsibility • Willingness to act with restraint for the common good • Adoption of Codes of Conduct

  12. Codes of Conduct for Accountants • AICPA • IMA • IIA • State Boards of Accountancy • SEC

  13. Code of Professional Conduct • AICPA Professional Standards, Vol. 2 (ET) • Composition • Principles • Rules • Interpretations, Rulings • Applicability • Compliance

  14. Principles • Preamble • Requires all CPAs to assume the obligation of self-discipline above and beyond requirements of law. • Calls for unswerving commitment to honorable behavior, regardless of personal advantage.

  15. Article I -- Responsibilities • Members should exercise sensitive professional and moral judgments in all activities • Primary responsibility is to the “public” • Responsibility to cooperate with each other to improve the art of accounting, maintain public confidence, and carry out self-governance.

  16. Article II --The Public Interest • Serve the public interest, honor the public trust, commitment to professionalism. • Public interest: collective well being of the people and institutions served

  17. Article III --Members should perform with the highest sense of integrity • The test for all decisions: “What would a person of integrity do?” • Characteristics: • Honesty • Candor • Protective of confidentiality

  18. Article IV -- A member should maintain objectivity and be free from conflicts of interest. • A state of mind: the distinguishing feature of our profession • Impartiality, intellectual honesty, freedom from conflicts of interest. • Requires independence in attest situations.

  19. Article V -- Due Care. A member should observe the profession’s technical and ethical standards, strive continually to improve competence and quality of service,and be duly diligent in performing services. • Continual quest for excellence, commitment to life-long learning and improvement. • Requires assessment of competence, due diligence, planning and supervision..

  20. Article VI -- Member in public practice should observe these principles in determining scope and nature of services. • Practice in firms that have quality controls • Determine whether other services might impair audit independence. • Assess whether all roles assumed are consistent with the role of a professional accountant.

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