Chapter 5 – Code of Ethics

Assurance Principles
August 21, 2019

1. What are the benefits that a code of ethics gives to the accountancy profession?
Ethics require accounting professionals to comply with the laws and regulations that
govern their jurisdictions and their bodies of work. Avoiding actions that could
negatively affect the reputation of the profession is a reasonable commitment that
business partners and others should expect
2. What is ethics?
Ethics or moral philosophy is a branch of philosophy that "involves systematizing,
defending, and recommending concepts of right and wrong behavior".
3. Does professional ethics continue to evolve over time or is it a static standard which are not
affected by current practices and changes in the professional environment? YES
4. Why do people act unethically?
Employees are more likely to act unethically when they don't see their action clearly
causing harm
5. All of the recognized professionals have several common characteristics, what are they?
1) Ability to Learn
2) Conscientiousness
3) Interpersonal Skills
4) Adaptability
5) Integrity

6. Can you define the role of an independent attester?

  someone who affirms or vouches for the correctness or truth or genuineness of
something
7. Why do you think there is an abundance of authoritative pronouncements governing financial
reports in the accountancy profession?
a.CPA is representative of the public-responsibility to serve
the publicb.Abundance of authoritative pronouncements governing financial reports-complex
body of knowledgec.
CPA license requires education, experience, and passing the CPA exam-standards of
admission to the professiond.CPA product is credibility-need for public confidence
8. A professional accountant is expected to be straightforward and honest in all his professional
and business dealings. What do you call that business term where professionals are expected to
be prim and proper in all their business transactions whether to the general public, the
government or their clients?
Principle Inegrity/ (Transaction at arms length)
9. What are the benefits of business ethics? (Outsource from non-prescribed textbook)
A Focus on Business Ethics Has Substantially Improved Society and Working Conditions
Having a Code of Ethics Provides a Moral Compass During Tough Times
Ethics in the Workplace Support Employee Growth and Provide Meaning to the Work
They Do
Ethics Programs Can Align with Personal Values and Improve Performance
Clear Business Ethics Can Promote a Strong Public Image and Goodwill
10. Compliance with the fundamental principles may potentially be threatened by a broad range of
circumstances. Can you identify what threats are involved in the following situations –
(a) Self-interest; (b) Self-review; (c) Advocacy; (d) Familiarity; and (e) Intimidation.
11. Can you identify two of the safeguards that may eliminate or reduce threats to an acceptable
level?
Safeguards by the profession, legislation or regulation
Safeguards created in the work environment
12. If there is a significant conflict which cannot be resolved, such as when an accountant
encountered a fraud, the reporting of which could breach the professional accountant’s
responsibility to respect confidentiality. What do you think should the accountant do?
Report it to the company audit head
13. If after exhausting all the relevant possibilities and the ethical conflict still remains unresolved
what should serve as the best alternative for the accountant to initiate to serve his profession’s
best interest?
Regardless of service or capacity, members should protect the integrity of
their in ethical requirements relating to objectivity, adequate consideration should be an
honest difference of opinion between a professional accountant and another
14. What principle is involved which imposes an obligation on all professional accountants not to
compromise their professional or business judgment because of bias, conflict of interest or the
undue influence of others?
The principle of objectivity
15. The professional accountant should maintain confidentiality even in a social environment,
particularly in circumstances involving long association with a business associate except
immediately family member? T or F
TRUE
16. The need to comply with the principle of confidentiality usually ends after the severing of the
professional accountant’s engagement relationship with the client or his employer. T or F
TRUE
17. What are the prohibitions concerning the practice of professional accountancy, more
particularly, in marketing and promoting themselves and their work so as not to bring the
profession into disrepute?
A professional accountant should not be associated with reports, returns, communications or other
information where they believe that the information: (a) Contains a materially false or misleading
statement; (b) Contains statements or information furnished recklessly; or (c) Omits or obscures
information required to be
 18. Can you identify what threat is involved in the discovery of a significant error during a re-
evaluation of the work of the professional accountant in public practice?
Professional accountants in public practice may also find the guidance in ... of
the threat and the safeguards applied, would conclude to be unacceptable.
19. If there is a significant threats evaluated in the engagement which are other than clearly
insignificant, what does the professional accountant need to do?
If identified threats are other than clearly insignificant, a professional accountant should,
where appropriate, apply safeguards to eliminate the threats or reduce them to an
acceptable level, such that compliance with the fundamental principles is not
compromised.
20. In situations where the practicing accountant will replace the former accountant of a company,
what will be the best alternative for the practicing accountant to do to satisfy himself as to
whether to accept the engagement or not?
21. If there is an ethical misconduct and decisions that damage the stakeholders which will impact
the company’s reputation both from the investor and consumer confidence perspectives, what
impact will it have on the shareholders’ stock value?
It will leads to the less of profit
22. Based on the following 3 examples of ethical dilemmas, what do you think is the worst
dilemma?
Taking credit for others work.
23. Do you see yourself committing dilemma A? Give a sample situation?
No. Because it’s like your taking advantage to others work and give credit to yourself though
youre not the one who truly created or done it
24. What do you understand by corporate culture dictates the rule of ethics in a company?
 In its most basic anthropological sense, enculturation refers to the process by which
humans learn the rules, customs,
25. Can you explain how ethics enhance employee commitment?
Investors’ loyalty?
Construct career growth opportunities. Respect your employees needs.Provide
Feedback.Clear Communication. Encourage Team Bonding
Customer satisfaction?
Employee satisfaction raises employee productivity, and higher productivity
means greater service and value to your customers. This value leads to
increased customer satisfaction and loyalty, which promotes profitability and continued
success.
Profit?
When employees perceive profit sharing favorably, commitment and
trust increase, encouraging employees to exert maximum effort, share information
and invest in firm-specific training that may not be valued outside of the firm
26. Do you know what “shareholder primacy” is which is the byword of every reputable company
during the early 79s and the succeeding three decades?
YES
 27. Why do people act unethically?
(a) Self-interest; (b) Self-review; (c) Advocacy; (d) Familiarity; and (e) Intimidation
28. How do you think you will behave as an adult when a friend ignores you?
I’ll be more civilized and respect for whatever decision she/he has.
29. When I was a university society treasurer, someone accidentally overpaid fees for a group event.
Initially I pocketed the difference and was on my way to a betting shop to increase the return
when my conscience said “Hi” and then I gave the money to the donkey sanctuary. Give me
your comments/reactions.
Well, that’s not a good idea most specially you don’t own that money really.
30. Give me factors why people act unethically?
(a) Self-interest; (b) Self-review; (c) Advocacy; (d) Familiarity; and (e) Intimidation.