As set under APES 110 Code of Ethics for Professional Accountant is considered as one of the most vital set of accounting principles. The learning considers ethical issues surrounding the case study by stating that the accountant must have the integrity in discharge of their duties.
The profession of accounting requires exact set of set of laws and regulations. Accounting can be defined as the procedure of recording and analysing the numerous financial transactions, which the business organization must comply with. The accountants should comply with the essential book-keeping principles (George et al., 2014).
Identification of ethical issues:
The primary issue states that Out of two appointed accountant one of the accountant did not had any experience in accounting. In spite of the inexperience of the newly appointed accountants Andy has been at fault by constantly leaving the work of accounting for the company as a result this it hampers the decision making process. As evident from the case study it has been found that Andy in spite of seeking the consent of the board to employ two junior accountants to control the daily activities of the business management failed to provide them with the required oversight or monitoring (Han et al., 2013). An established set of guidance offers an accounting profession with the essential ingredients of directing him towards to the ethical behaviour. The ethical code of professional conduct lies down that the responsibility of the accountant is towards the public interest and integrity with objectivity and due care.
Every business entity has the responsibility of the accounting profession to provide the company with the information at some point in the life cycle of business. Additional ethical issue that is identified in present case study is the inappropriate management of financial reports that does not reflect a true and fair view of the company performance (Krier et al., 2014). The ethical issue in this context is the process of employing the questionable method of accounting to enhance the financial results. An accountant might record revenues and expenditure in the in correct manner or might miss out the expenditure in total. Recurring incidences of aggressive accounting represent the lack of ethical behaviour.
It is worth mentioning that the ethical behaviour in the economy have far reaching effect in the business operations of the company. Accountants and auditors are time tempted to change the financial results and there are instances where the accountants rationalize the behaviour by calling it to be creative and aggressive in accounting (Owens, 2016).
The two important values of professional conduct enclosed in the APESB 110 code of ethics of specialised accountants that have been breached are detailed below
- Section 290 and 291 of the Audit and Review Engagement have been breached
- In compliance with the APESB 110 Ethical Hemp Ltd have broken the Professional Competence and Due Care
As evident from the current case study it is understood that the accountant have failed to act industriously in compliance with the appropriate technological and proficient standards at the time of providing proficient services. The standard of professional capability and due care implies that the members of the organizations should maintain the expert knowledge and skill at the required level in order to make sure that the clients or the employees getting competent Professional Service (Union, 2014).
APES 110 forms the chief codes of principles in the procedure of accounting. From the above identified ethical issues it can be stated that Ethical Hemp Ltd have breached the Professional Competence and Due Care.
Continuing professional development provides the member with the member of the firm in developing and maintaining the capabilities to perform or discharge their responsibility competently in the professional environment. Competent Professional Service needs the implementation of resonance judgement in implementing the specialized information and skills in the presentation of such service.
One must denote that preservation of expert competency that needs constant awareness and understanding of the important financial, professional and business developments (Worker, 2013). As obvious from the current scenario of the present case study of Ethical Hemp Ltd it can be stated Andy failed to discharge his responsibilities with due care and diligence in the maintaining the capabilities of developing the new hired accountants. Furthermore, it has been found that both Helen and Conrad failed to make a crucial decisions which must be ordinarily left up to Andy or board of the company.
In the present context of Ethical Health Lamp Ltd it is anticipated that the accountants should fulfil with the basic principles of APES 110 at the time of imparting professional services.
As well-defined under the APES 110, the accountants have got to obey with all the relevant book-keeping rules and principles and it is anticipated that the accountants should be directed by the strength of this code (Whelan et al., 2014). It is not the objective of the APES 110 to detract the accountants from any sort of accountabilities, which might be implemented on the law or the regulations. As stated under the APES 110, the accountants should not be linked with any sort of manoeuvring of bookkeeping information of the business association.
The existing instances in the present case study of Ethical Health Ltd have failed to demonstrate a true and fair view of the financial position since the external auditors is found to have breached the contract of APES 110. One should denote that during the procedure of auditing the principles of APES 110 have lawful enforceability since the accountants of Ethical Health Lamp Ltd have failed to comply with the principles of APES 110 and have considerably breached those principles (Lefkowitz, 2017).
Ethical approach for desired course of action:
As per the given case study, the main ethical decision that is surrounding the present case study is the in appropriate discharge of responsibilities and Professional Competence and Due Care. The Laura Nash model is regarded as the ethical approach of decision making in order to take major decision in the critical situations (Koehler, 2015). The current model will be appropriate in the present context. The necessary audit process on the financial report is incorporated in the meeting agenda. Under the present ethical dilemma, the external auditor can take a stable decision by making use of the Laura Nash Model. In addition to this, the members of the audit committee are suspecting that financial results have not been able to reflect a true and financial position of the organization.
The anticipated results of the existing state of affairs needs to be accessible to the organization in order to make each the employee aware of the probable threat to the performance of the company without hampering the ethical business practices.
In the present situation, it is necessary to clearly address the major issues of recording the financial transaction to the management and accountant of the company for major decision-making. Initially, the audit associates requirements to precisely describe the main issues to build awareness of the negative impacts of the problems (Julnes & Bustelo, 2014).
Along with this, the external auditor is required to make the management maintain the professional competence by understanding the relevant technical, professional and business development. Diligence enables in encompassing the accountability of acting in agreement with the needs by cautiously and methodically on appropriate basis. Additional course of action that is required to be undertaken is the implementation of moralities of principles of objectivity by not compromising their expert or trade judgement due to the bias, conflict of interest or the unnecessary influence of others (Christ & Burrit, 2016).
Answer to requirement C:
The principles of professional behaviour will help in imposing a compulsion on all the Members to obey with the pertinent laws and set of laws in order to avoid any course of action or exclusion where the members understand or might disgrace the occupation (Cohen, 2013). In accordance with the APESB 110 the Code of Ethics for Professional Accountants in the present course of action will help in enhancing the professional behaviour. This comprises of the performance or omission that a sensible and informed third party weigh all the exact facts and state of affairs obtainable to the associate during that time would be much probable to bring to a close with the unfavourably impacts for the better reputation of the profession. To maintain the specialized information and skill at the required level in assuring that the employees receive provide knowledgeable specialized service.
To conclude with, according to the above stated conversation, it can be stated that reliability forms the main ethical factor in the line of work of bookkeeping since the accountants requires to be sincere and simple. In these present context APES 110 guidelines comprises of the primary principles of the bookkeeping where all the accountants should comply. On the other hand, it can be seen that an organization can undertake professional ethical decision with the help of Laura Nash Model. Therefore, it can be concluded that the truthfulness and moral code are two of the chief support of the bookkeeping where the accountants in the present context must follows.
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