A professional accountant is a very respected and responsible designation in an employing organization or in a firm. In this profession there are various ethical issues which can be overcome by the implementation of Code proposed by Certified Practising Accountants (CPA), Accounting Professional and Ethical Standard Board (APESB) or International Ethics Standard Boards for Accountants (IESBA). This Code can help in overruling those ethical issues which can be faced during practicing professional accountant of any organization. This report also emphasis on the principles of the code of ethics which gives a better explanation why the ethics are that much important for the professional accountant. The code of ethics is divided into three parts A, B and C to the better achievement of implementation of these codes as in these parts practices applied for individual and public sector are classified separately. This report elaborates on the following paragraphs, firstly Accounting profession and the ethical standards in this profession, secondly a brief explanation on APESB who proposed the Code of Ethics for the professional accountant in Accounting Profession. The Code of ethics is explained part wise as there consequences may be threats and their safeguards are also explained. Ethical conflict resolution is also paragraphed in the last section.
Accounting Profession and Ethical Standards
It is the responsibility of Certified Practising Accountants CPA Australia members to act in favor of public interest and satisfy the fundamental principles of professional behavior, objectivity, integrity, due care and professional competence in all dealings and confidentiality (Hong 2012).
According to Athanasiou (2014) APES 110 and the APES 200 series is applied for all the members and APES 300 series applied to the members in public practice (2014).
Accounting Professional and Ethical Standard Board (APESB)
APESB was established in 2006 which is an independent body as an initiative of Charted Accountants Australia and New Zealand and CPA Australia (Brown 2016). The major role of APESB is to develop and ethical standards and issue professional in the interest of public that apply to the two accounting bodies and to members of CPA Australia.
Code of Ethics for Professional Accountants
Code of Ethics was issued by the International Ethics Standard Boards for Accountants (IESBA) based on overcoming ethical issues faced by them by International Federation Accountants (IFAC) (Sadowski and Thomas 2012). The code contains the prefix AUST for the paragraphs and additional Australian definitions.
The Code uses the word “Shall” to establish a requirement on the firm or the members; Code is divided into three parts which are listed below
Fundamental Principles of the Code
Following are the fundamental principles of Code of Ethics:
Integrity: Bonaci et al. (2013) discussed that during the profession of professional and business relationships a professional accountant should be honest and straight forward towards his duty.
Objectivity: Kidwell et al. (2013) stated that a professional accountant should never override his judgments made during his profession in business under the influence of others and should not be biased.
Professional Competence and Due Care: According to this principle it is the duty of a professional accountant to ensure that employer or a client receives professional services efficiently in a manner to maintain level of the skill and required knowledge as a professional, which is based on current development in legislation, techniques and practices. The professional accountant should act in accordance with the technical and professional standards which are applicable while providing professional services and he should be diligent while taking any action.
Confidentiality: Information should not be disclosed by a professional accountant to any of the third party without any authority which is specific and proper related to the business and profession unless there is a legal duty to expose that information to them (Cameron and O’Leary 2015). The information gathered during the business or profession should be respected and confidentiality of that information should be maintained and he should not use such information for his personal benefits or for any of his family member’s benefits.
Professional behavior: Zelf (2016) defined it as all the actions that can discredit the profession of a professional accountant should be eliminated in the management and he should obey the regulations and should be relevant with the laws.
Threats and Safeguards
Abroad range of circumstances may be threatened after the compliance of fundamental principles several threats may be categorized as:
Self-interest threat: Shaub and Braun (2014) discussed that it can be occurred due to the interest in finance of professional accountant himself or any of his close family member.
Advocacy threats: This advocacy threat occurred with the promotion of an opinion or position by the professional accountant to the particular point which may be comprised of subsequent objectivity.
Intimidation threats: It mainly occurred due to the lack of encouragement of the professional accountant from acting objectively due to the threats actual or perceived.
Self-review threats: Self-review threat occurred due to the judgment made earlier which needs re-evaluation by the professional accountant who was responsible for that judgment.
Family-Threats: It mainly occurred due to the emotional situation of the professional accountant who can be more sympathetic to the interest of others because of the close relationship.
These threats can be eliminated or reduced by applying the practice of safeguards which can be categorized in two groups firstly, by following the Safeguards created by legislation or regulation and profession (Leipziger 2015). Secondly, threats can be reduced by the safeguards experience during the work or job environment.
There are various practices practiced by the legislation or regulation and profession in the safeguards which were created by them, some of them are listed as Experience requirements and training, Educational for starting this profession. Secondly, Professional development requirements should be in continuing process followed by, professional standards. Corporate governance regulations and the report should be reviewed by an external third party who is legally empowered. Disciplinary procedures and monitoring regulation or profession are also included in this list.
Amponsah et al. (2016) stated that the part B and C of this Code are the genuine explanation of the safeguards in the work environment for professional accountant during public practice. It can also be practiced in business.
There are certain safeguards which may help in the increment of likelihood of identifying or deterring unethical behavior. Legislation, profession or regulation or an organization can also create these safeguards taking in account the following objectives: Well complaint solution for the public ethical issues which is very effective for the organization, a regulator or professional, which may contribute in enabling employers, colleagues and the members of public to reduce or eliminate unethical and unprofessional behavior. Other objective is that explicit state of duty should report breaches of ethical requirements.
Ethical Conflict Resolution
During the process of evaluation compliance of fundamental principles of code of ethics, a professional accountant may face some ethical conflicts which need to be solved by him only (Weiss 2014). While initiating process of resolution in formal or informal conflicts, he should consider the following as parts of the resolution process
- Involved ethical issues.
- Facts which are relevant.
- Alternative courses of action.
- Fundamental Principles which are related to the question matters (Brigham and Houstan 2012).
- Internal Procedures should be well established.
A professional accountant should consider the above issues give an idea about appropriate course of actions which are consistent with the diagnosed fundamental principles. He should pre-check all the aspects of course of action and it is important to consider their consequences. Any matter which cannot be solved by the accountant should be discussed with the organization or the firm in which he is employed for the perfect resolution on that matter. The practice of making documents of the discussions held, substance issues, decision taken or concerning that issue by a professional accountant should be in the best interest (Tweedie et al. 2013). When any significant conflict cannot be resolved by the professional accountant even after exhausting all the possible situations then professional accountant should withdraw back himself from that matter and should disconnect himself from that matter. It would be appropriate if he withdraws from the specific assignment or engagement team or the other aspect may be that he should resign his designation from the engagement of the employing organization or the firm.
Based on above facts it can be concluded that the ethics in the accounting profession is very important for the practice of a responsible and loyal accountant. For the achievement of these a Code is proposed by IESBA in order to make decisions more accurately and smoothly by the accountants. A professional accountant may suffer from ethical issues in many situations, some of them are mentioned above in both individual and third party prospective. How to take ethical decisions in various ethical situations by keeping aside all the emotions and considering profession above all is also proposed in this paper. The Code of Ethics explained that how much ethics are important and how much is the necessity of perfect decision making should be done considering all the consequences by a professional accountant. A model of some points is mentioned above to carry out certain course of action in the profession of accounting whenever there is some ethical issues and conflict between the people in the firm.
Review of Article 1:
Article 1 name: The influence of internal organisational factors on corporate-community partnership agendas: an Australian case study.
Article citation: Glennie, M. and Lodhia, S., 2013. The influence of internal organisational factors on corporate-community partnership agendas: an Australian case study. Meditari Accountancy Research, 21(1), pp.52-67.
This paper focuses on examine how factors of international organization affect the objectives of partnerships between the corporate-communities. Corporate-communities are the collaboration between the community group and the business which have reached to prominence recently. Methodology have been explained in this paper which emphasis on the goals of partnership development and the attitudes of the members towards the environment or social goals by interviewing the respective both from the community and the corporate members in Australia. To help facilitate the study sample is collected and analyzes the influence on the goals formation through the community groups and the voices of corporation of corporate-community partnerships.
Review of Article 2:
Article 2 name: Board diversity and CSR reporting: an Australian study
Article 2 citation: Rao, K., Rao, K., Tilt, C. and Tilt, C., 2016. Board diversity and CSR reporting: an Australian study. Meditari Accountancy Research, 24(2), pp.182-210.
This report focuses on the examination of relationship between Corporate Social Responsibility (CSR) and particular board diversity among the top 50 companies in Australia over a period of three years. This paper includes quantitative analysis and content analysis to analyze the extent of disclosures of CSR in the annual report. An analysis is done and a result is concluded on the basis of regression analysis which revealed three boards of diversity attributes and overall diversity measures which have the potentials to influence the report submitted by CSR. This report concludes that there should be enhancement in the discloser of CSR in Australia as it is very much less compared to other countries.
Review of Article 3:
Article 3 name: Australian accounting academics: challenges and possibilities
Article 3 citation: Guthrie, J., Evans, E. and Burritt, R., 2014. Australian accounting academics: challenges and possibilities. Meditari Accountancy Research, 22(1), pp.20-37.
This report focuses on providing attention-directing diegesis, thought provoking, about the experience quality for those who are working as academic accounting scholars. The author has used storytelling to as narrator and a literature review is also given to support the challenges and possibilities for accounting academics. This paper used a story to explore the theme of the experience of academic for accounting academics in Australia. It can be seen that author has written the journal with his experience of more than 80 years which are positively engaged with the profession. This paper concludes that there are numbers of possibilities for the Australian accounting academy all of which are completely dependent on the symbiotic relations with the three elements of the profession.
Review of Article 4:
Article 4 name: Understanding the responses of professional accounting bodies to crises: The case of the Australian profession.
Article 4 citation: Carnegie, G.D. and O'Connell, B.T., 2012. Understanding the responses of professional accounting bodies to crises: The case of the Australian profession in the 1960s. Accounting, Auditing & Accountability Journal, 25(5), pp.835-875.
This paper focuses on a case study which happened in 1960 but published in 2012 to examine comprehensively the two big professional accounting bodies of corporate, regulatory, financial crisis emphasizing on the necessity of defense of the legitimacy of profession. The whole paper is drawn by the surviving primary and secondary sources and applied the perspectives on the legitimacy typology of Suchman and the dynamics of occupational groups. Responding the crisis in defending the profession legitimacy, the Paper makes original contribution in exploring the legitimacy and dynamics of occupational groups. This paper concludes that it was the need to address key responses which are made in defending the legitimacy of a profession in a holistic manner.
Review of Article 5:
Article 5 name: The Australian accounting academic in the 1950s
Article 5 citation: E. Persson, M. and J. Napier, C., 2014. The Australian accounting academic in the 1950s: RJ Chambers and networks of accounting research. Meditari Accountancy Research, 22(1), pp.54-76.
This paper focuses on examining the challenges faced by the Australian accounting academic based on the case study of R.J. Chambers, in the 1950s, in entering the account research community at that time approximately in the whole USA and UK. This paper examines on the overcome techniques of the obstacles to publishing and conducting accounting research using “Trials of strength”. Actor-Network theory is used in this theory to provide analytical structure to “counter narrative” historical firms which are archived. This paper has used documents from the most extensive archive related to an individual academic in accounting.
Review of Article 6:
Article 6 name: Climate change accounting and the Australian mining industry: exploring the links between corporate disclosure and the generation of legitimacy.
Article 6 citation: Pellegrino, C. and Lodhia, S., 2012. Climate change accounting and the Australian mining industry: exploring the links between corporate disclosure and the generation of legitimacy. Journal of Cleaner Production, 36, pp.68-82.
This paper focuses on the process of disclosing by the use of key bodies in the Australian mining industry as a medium to climate change in accounting ensures the operation of social license. Legitimacy theory framework is utilized in this paper in addition with the multi-case analysis to examine the practices of disclosure of the environment with the help of a variety of media of two industries and two company bodies within the Australian mining industries. This paper concludes variations in the strategies of disclosing legitimacies and media of communication employed which may be due to their focus on differing stakeholders group and conferring publics.
Amponsah, E.B., Boateng, P.A. and Onuoha, L.N., 2016. Confidentiality of Accounting Academics: Consequences of Nonconformity. Journal of education and practice, 7(3), pp.43-54.
Athanasiou, A., 2014. Avoiding client persuasion. Taxation in Australia, 48(10), p.601.
Bonaci, C.G., Strouhal, J., Müllerová, L. and Roubícková, J., 2013. Corporate Governance Debate on Professional Ethics in Accounting Profession. Central European Business Review, 2(3), p.30.
Brigham, E.F. and Houston, J.F., 2012. Fundamentals of financial management. Cengage Learning.
Brown, R., 2016. Accountants behaving badly. Professional Planner, (91), p.18.
Cameron, R.A. and O'Leary, C., 2015. Improving ethical attitudes or simply teaching ethical codes? The reality of accounting ethics education. Accounting Education, 24(4), pp.275-290.
Hong Yang, H., 2012. Western concepts, Chinese context: A note on teaching accounting offshore. International Journal of Pedagogies and Learning, 7(1), pp.20-30.
Kidwell, L.A., Fisher, D.G., Braun, R.L. and Swanson, D.L., 2013. Developing learning objectives for accounting ethics using Bloom's taxonomy. Accounting Education, 22(1), pp.44-65.
Leipziger, D., 2015. The corporate responsibility code book. Greenleaf Publishing.
Sadowski, S.T. and Thomas, J.R., 2012. Toward a convergence of global ethics standards: A model from the professional field of accountancy. International Journal of Business and Social Science, 3(9).
Shaub, M.K. and Braun, R.L., 2014. Call of duty: A framework for auditors’ ethical decisions. In Accounting for the Public Interest (pp. 3-25). Springer Netherlands.
Tweedie, D., Dyball, M.C., Hazelton, J. and Wright, S., 2013. Teaching global ethical standards: a case and strategy for broadening the accounting ethics curriculum. Journal of Business ethics, 115(1), pp.1-15.
Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.
Zeff, S.A., 2016. Forging accounting principles in five countries: A history and an analysis of trends. Routledge.