Profes Sional Standa Rds Set FOR Certifi ED Accoun Tants

Philippine School of Business Administration
826 R. Papa St., Sampaloc, Manila, Philippines
PROFES Department of Accountancy
SIONAL
STANDA
RDS SET
FOR
CERTIFI
Princess Joy M. Banquil
ED Accounting 17 – Synthesis Report 2
Dr. Alfredo M. Joson, CPA
ACCOUN
1|Page
TANTS
Department of Accountancy
Introduction:
A distinctive sign of the accountancy profession is its acknowledgment of the duty to act
within the public interest. Consequently, an expert accountant’s obligation isn't only to satisfy
the necessities of a personal customer or manager. In acting within the public interest, a licensed
accountant will notice and follow certain Code of Conduct or Ethical Standards that's set in lined
with the said profession.
Professional accountants manage the private monetary subtleties of individuals and
associations. Some can execute million-dollar exchanges, et al. help with defending retirement of
assets of some corporations. Moral codes are the crucial rules that accounting experts conceive to
keep to upgrade their calling, carry on open trust, and exhibit trustworthiness and
reasonableness.
Sadly, not everybody who works within the accounting field is dependable. Each day
infringement of public and personal trust happen, and settling moral issues doesn't generally end
well. In that, some organizations and corporations set ethical standards for professional
accountants to be used not just from themselves, but for all in the accounting field.
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Definition of Key Terms
1. Standard – something established by authority, custom, or general consent as a model,
example, or point of reference the quality of the reasonable person.
- Something established by authority as a rule for the measure of quantity, weight,
extent, value, or quality.
2. Accountancy - Accountancy is that the practice of recording, classifying, and reporting
on business transactions for a business. It provides feedback to management regarding
the financial results and standing of a corporation. The key accountancy tasks are noted
below.
3. Accountant - The term accountant refers to knowledgeable who performs accounting
functions like account analysis, auditing, or financial plan analysis. Accountants work
with accounting firms or internal account departments with large companies. they'll also
founded their own, individual practices. After meeting state-specific educational and
testing requirements, these professionals are certified by national professional
associations.
4. Independence - The state or quality of being independent; freedom from dependence;
exemption from reliance on, or control by others; self-subsistence or maintenance;
direction of one's own affairs without interference.
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5. Objectivity - In philosophy, objectivity is that the concept of truth independent from
individual subjectivity. A proposition is taken into account to own objective truth when
its truth conditions are met disinterestedly caused by a sentient subject. Scientific
objectivity refers to the flexibility to evaluate without partiality or external influence.
6. Integrity - Integrity is that the practice of being honest and showing a regular and
uncompromising adherence to strong moral and ethical principles and values. In ethics,
integrity is considered the honesty and truthfulness or accuracy of one's actions.
7. Confidentiality - Confidentiality involves a collection of rules or a promise usually
executed through confidentiality agreements that limits access or places restrictions on
certain varieties of information.
8. Professional Competence - the aptitude to perform the duties of one's profession
generally, or to perform a selected professional task, with skill of a suitable quality.
9. Professional Behaviour - Professional behaviour may be a variety of etiquette within the
workplace which is linked primarily to respectful and courteous conduct. Believe it or
not, professional behaviour can benefit your career and improve your chances of future
success. Many organisations have specific codes of conduct in situ, but some don't.
10. Due Care - refers to the hassle made by an ordinarily prudent or reasonable party to
avoid harm to a different, taking the circumstances into consideration. It refers to the
amount of judgment, care, prudence, determination, and activity that someone would
reasonably be expected to try to under particular circumstances.
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There are certain standards that professional accountant should follow/comply:
Integrity
- The rule of integrity forces a commitment on all expert accountant to be direct and
legitimate in all expert, furthermore, business connections. Integrity likewise infers
reasonable managing and honesty/uprightness.
- To be straightforward and honest in all professional and business relationships.
- A professional accountant will not purposely be related with reports, returns,
correspondences or other data where the professional accountants accepts that the
data:
o Contains a substantially bogus or deluding explanation;
o Contains articulations or data outfitted foolishly; or
o Omits or darkens data needed to be incorporated where such exclusion or lack
of definition would be deceiving.
At the point when a professional accountant becomes mindful that the accountant has been
related with such data, the bookkeeper will find a way to be disassociated from that data.
Objectivity
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- The rule of objectivity forces a commitment on all professional accountant not to
compromise their expert or business judgment.
- A professional accountant might be presented to circumstances that may weaken
objectivity. It’s unfeasible to characterize and recommend every such circumstance.
A professional accountant won’t play out an expert assistance if a situation or
relationship predispositions or unduly impacts the accountant’s proficient judgment
concerning that administration.
Professional Competence and Due Care
- The principle of professional competence and due care imposes the following
obligations on all professional accountants:
o To keep up proficient information and aptitude at the level needed to
guarantee that customers or managers get skillful expert help; and
o To act constantly as per material specialized and proficient guidelines while
offering proficient types of assistance.
- Equipped expert help requires the activity of good instinct in applying proficient
information and aptitude in the exhibition of such administration. Proficient ability
might be partitioned into two separate stages:
o Attainment of expert skill; and
o Maintenance of expert capability.
- The support of expert skill requires a proceeding mindfulness and a comprehension of
applicable specialized, proficient and business improvements. Proceeding with
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proficient advancement empowers a proficient bookkeeper to form and carry on the
skills to perform ably inside the expert climate.
- Diligence encompasses the responsibility to act in accordance with the requirements
of an assignment, carefully, thoroughly and on a timely basis.
- A professional accountant shall take reasonable steps to ensure that those working
under the professional accountant’s authority in an exceedingly professional capacity
have appropriate training and supervision.
- Where appropriate, a professional accountant shall make clients, employers or other
users of the accountant’s professional services attentive to the constraints inherent
within the services.
Confidentiality
- The principle of confidentiality imposes an obligation on all professional accountants
to refrain from:
o Disclosing outside the firm or employing organization confidential
information acquired as a results of professional and business relationships
without proper and specific authority or unless there's a legal or professional
right or duty to disclose; and
o Using hint acquired as a results of professional and business relationships to
their personal advantage or the advantage of third parties.
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- A professional accountant shall maintain confidentiality, including in a very social
environment, being awake to the likelihood of inadvertent disclosure, particularly to a
detailed business associate or an in depth or immediate friend.
- A professional accountant shall maintain confidentiality of data disclosed by a
prospective client or employer.
- A professional accountant shall maintain confidentiality of data within the firm or
employing organization.
- A professional accountant shall take reasonable steps to confirm that staff under the
professional accountant’s control and persons from whom advice and assistance is
obtained respect the professional accountant’s duty of confidentiality.
- The need to suits the principle of confidentiality continues even after the top of
relationships between an expert accountant and a client or employer. When
knowledgeable accountant changes employment or acquires a brand new client, the
professional accountant is entitled to use prior experience. The professional
accountant shall not, however, use or disclose any tip either acquired or received as a
results of an expert or account.
- The following are circumstances where professional accountants are or could also be
required to disclose hint or when such disclosure may be appropriate:
o Disclosure is permitted by law and is allowed by the client or the employer;
o Disclosure is required by law, for example:
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 Production of documents or other provision of evidence within the
course of legal proceedings; or
 Disclosure to the acceptable public authorities of infringements of the
law that come to light; and
o There's knowledgeable duty or right to disclose, when not prohibited by law:
 To befits the standard review of a member body or professional body;
 To reply to an inquiry or investigation by a member body or regulatory
body;
 To safeguard the professional interests of an expert accountant in legal
proceedings; or
 To accommodates technical standards and ethics requirements.
- In deciding whether to disclose wind, relevant factors to think about include:
o Whether the interests of all parties, including third parties whose interests
could also be affected, might be harmed if the client or employer consents to
the disclosure of data by the professional accountant.
o Whether all the relevant information is understood and substantiated, to the
extent it’s practicable; when true involves unsubstantiated facts, incomplete
information or unsubstantiated conclusions, professional judgment shall be
utilized in determining the sort of disclosure to be made, if any.
o The sort of communication that's expected and to whom it's addressed.
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o Whether the parties to whom the communication is addressed are appropriate
recipients.
Professional Behaviour
- The principle of professional behaviour imposes an obligation on all professional
accountants to go with relevant laws and regulations and avoid any action that the
professional accountant knows or should know may discredit the profession. This
includes actions that an affordable and informed third party, weighing all the precise
facts and circumstances available to the professional accountant at that point, would
be likely to conclude adversely affects the nice reputation of the profession.
- In marketing and promoting themselves and their work, professional accountants
shall not bring the profession into disrepute. Professional accountants shall be honest
and truthful and not:
o Make exaggerated claims for the services they're ready to offer, the
qualifications they possess, or experience they need gained; or
o Make disparaging references or unsubstantiated comparisons to the work of
others.
Professional Appointment
1. Client Acceptance
a. Before accepting a replacement client relationship, knowledgeable accountant
publicly practice shall determine whether acceptance would create any threats to
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compliance with the elemental principles. Potential threats to integrity or
professional behaviour is also created from, as an example, questionable issues
related to the client (its owners, management or activities).
b. Client issues that, if known, could threaten compliance with the basic principles
include, for instance, client involvement in illegal activities (such as money
laundering), dishonesty or questionable financial reporting practices.
c. A professional accountant publicly practice shall evaluate the importance of any
threats and apply safeguards when necessary to eliminate them or reduce them to
an appropriate level.
Examples of such safeguards include:
 Obtaining knowledge and understanding of the client, its owners,
managers and people answerable for its governance and business
activities; or
 Securing the client’s commitment to enhance corporate governance
practices or internal controls.
d. Where it's unattainable to cut back the threats to an appropriate level, the
professional accountant publically practice shall decline to enter into the client
relationship.
e. It is recommended that knowledgeable accountant publicly practice periodically
review acceptance decisions for recurring client engagements.
2. Engagement Acceptance
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a. The fundamental principle of professional competence and reasonable care
imposes an obligation on knowledgeable accountant publically practice to
produce only those services that the professional accountant publicly practice
is competent to perform. Before accepting a selected client engagement, an
expert accountant publically practice shall determine whether acceptance
would create any threats to compliance with the elemental principles. As an
example, a self-interest threat to professional competence and guardianship is
formed if the engagement team doesn't possess, or cannot acquire, the
competencies necessary to properly do the engagement.
b. A professional accountant publicly practice shall evaluate the importance of
threats and apply safeguards, when necessary, to eliminate them or reduce
them to a suitable level. samples of such safeguards include:
 Acquiring an appropriate understanding of the character of the client’s
business, the complexity of its operations, the precise requirements of
the engagement and therefore the purpose, nature and scope of the
work to be performed;
 Acquiring knowledge of relevant industries or subject matters;
 Possessing or obtaining experience with relevant regulatory or
reporting requirements;
 Assigning sufficient staff with the mandatory competencies;
 Using experts where necessary;
12 | P a g e
 Agreeing on a sensible timeframe for the performance of the
engagement; or
 Complying with internal control policies and procedures designed to
produce reasonable assurance that specific engagements are accepted
only they will be performed competently.
c. When knowledgeable accountant publically practice intends to depend upon
the recommendation or work of an expert, the professional accountant
publicly practice shall determine whether such reliance is warranted. Factors
to contemplate include: reputation, expertise, resources available and
applicable professional and ethical standards. Such information is also gained
from prior association with the expert or from consulting others.
3. Changes in Professional Appointment
a. An expert accountant publically practice who is asked to switch another
professional accountant publically practice, or who is considering tendering
for an engagement currently held by another professional accountant publicly
practice, shall determine whether there are any reasons, professional or
otherwise, for not accepting the engagement, like circumstances that make
threats to compliance with the elemental principles that can't be eliminated or
reduced to a suitable level by the appliance of safeguards. For instance, there
could also be a threat to professional competence and charge if knowledgeable
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accountant publicly practice accepts the engagement before knowing all the
pertinent facts.
b. A professional accountant publicly practice shall evaluate the importance of
any threats. looking on the character of the engagement, this might require
direct communication with the present accountant to determine the facts and
circumstances regarding the proposed change so the professional accountant
publicly practice can decide whether it might be appropriate to simply accept
the engagement. For instance, the apparent reasons for the change in
appointment might not fully reflect the facts and will indicate disagreements
with the present accountant that will influence the choice to simply accept the
appointment.
Conflict of Interest
- A professional accountant publically practice shall take reasonable steps to spot
circumstances that would pose a conflict of interest. Such circumstances may create
threats to compliance with the basic principles. As an example, a threat to objectivity
is also created when knowledgeable accountant publicly practice competes directly
with a client or incorporates a venture or similar arrangement with a significant
competitor of a client. A threat to objectivity or confidentiality may also be created
when an expert accountant publically practice performs services for clients whose
interests are in conflict or the clients are under consideration with one another in
regard to the matter or transaction in question.
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- An expert accountant publically practice shall evaluate the importance of any threats
and apply safeguards when necessary to eliminate the threats or reduce them to a
suitable level. Before accepting or continuing a client relationship or specific
engagement, the professional accountant publically practice shall evaluate the
importance of any threats created by business interests or relationships with the client
or a 3rd party.
- Depending upon the circumstances giving rise to the conflict, application of 1 of the
subsequent safeguards is usually necessary:
o Notifying the client of the firm’s business interest or activities which will
represent a conflict of interest and obtaining their consent to act in such
circumstances; or
o Notifying all known relevant parties that the professional accountant
publically practice is acting for 2 or more parties in respect of a matter where
their respective interests are in conflict and obtaining their consent to so act;
or
o Notifying the client that the professional accountant publicly practice doesn't
act exclusively for anybody client within the provision of proposed services
(for example, in a very particular market sector or with relevancy a particular
service) and obtaining their consent to so act.
- The professional accountant shall also determine whether to use one or more of the
subsequent additional safeguards:
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o The employment of separate engagement teams;
o Procedures to forestall access to information (for example, strict physical
separation of such teams, confidential and secure data filing);
o Clear guidelines for members of the engagement team on problems with
security and confidentiality;
o The employment of confidentiality agreements signed by employees and
partners of the firm; and
o Regular review of the appliance of safeguards by a senior individual not
attached relevant client engagements.
Summary:
Integrity - The rule of integrity forces a commitment on all expert accountant to be direct and
legitimate in all expert, furthermore, business connections. Integrity likewise infers reasonable
managing and honesty/uprightness.
Objectivity - The rule of objectivity forces a commitment on all professional accountant not to
compromise their expert or business judgment.
Professional Competence and Due Care - The principle of professional competence and due
care imposes the following obligations on all professional accountants:
o To keep up proficient information and aptitude at the level needed to
guarantee that customers or managers get skillful expert help; and
16 | P a g e
o To act constantly as per material specialized and proficient guidelines while
offering proficient types of assistance.
Confidentiality - The principle of confidentiality imposes an obligation on all professional
accountants to refrain from:
o Disclosing outside the firm or employing organization confidential
information acquired as a results of professional and business relationships
without proper and specific authority or unless there's a legal or professional
right or duty to disclose; and
o Using hint acquired as a results of professional and business relationships to
their personal advantage or the advantage of third parties.
Professional Behaviour - The principle of professional behaviour imposes an obligation on all
professional accountants to go with relevant laws and regulations and avoid any action that the
professional accountant knows or should know may discredit the profession.
Client Acceptance - Before accepting a replacement client relationship, knowledgeable
accountant publicly practice shall determine whether acceptance would create any threats to
compliance with the elemental principles.
Engagement Acceptance - The fundamental principle of professional competence and
reasonable care imposes an obligation on knowledgeable accountant publically practice to
produce only those services that the professional accountant publicly practice is competent to
perform.
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Changes in Professional Appointment - An expert accountant publically practice who is asked
to switch another professional accountant publically practice, or who is considering tendering for
an engagement currently held by another professional accountant publicly practice, shall
determine whether there are any reasons, professional or otherwise, for not accepting the
engagement, like circumstances that make threats to compliance with the elemental principles
that can't be eliminated or reduced to a suitable level by the appliance of safeguards.
Conflict of Interest A professional accountant publically practice shall take reasonable steps to
spot circumstances that would pose a conflict of interest. Such circumstances may create threats
to compliance with the basic principles. as an example, a threat to objectivity is also created
when knowledgeable accountant publicly practice competes directly with a client or incorporates
a venture or similar arrangement with a significant competitor of a client.
Bibliography:
International Federation of Accountants. (May 2013). International Ethics Standards Board for
Accountants: Handbook of the Code of Ethics for Professional Accountants. Retrieved
from http://picpa.com.ph/attachment/21720171215650.pdf
Professional Accountant. (n.d.) A Law Dictionary, Adapted to the Constitution and Laws of the
United States. By John Bouvier.. (1856). Retrieved from https://legal-
dictionary.thefreedictionary.com/Professional+Accountan
18 | P a g e
(n.d.). Retrieved from https://www.readyratios.com/reference/audit/professional_judgment.html
Bragg, S. (2018, October 16). Material. Retrieved from
https://www.accountingtools.com/articles/2017/5/9/material
Kenton, W. (2020, February 19). Understanding Undue Influence. Retrieved from
https://www.investopedia.com/terms/u/undue-influence.asp
Kenton, W. (2020, January 29). Third Party. Retrieved from
https://www.investopedia.com/terms/t/third-party.asp
Kenton, W. (2020, January 29). Adverse Opinion. Retrieved from
https://www.investopedia.com/terms/a/adverseopinion.asp
http://picpa.com.ph/attachment/21720171215650.pdf
https://www.aicpa.org/research/standards.html
https://www.ifac.org/knowledge-gateway/building-trust-ethics/discussion/international-
code-ethics-professional
https://www.ifac.org/system/files/publications/files/ifac-code-of-ethics-for.pdf
https://www.ethicsboard.org/projects/revised-code-ethics-completed
https://niat.edu.ph/students/professional-standards/
19 | P a g e
https://www.charteredaccountantsanz.com/member-services/member-obligations/codes-
and-standards
https://egrove.olemiss.edu/aicpa_prof/
20 | P a g e

Profes Sional Standa Rds Set FOR Certifi ED Accoun Tants

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Philippine School of Business Administration

826 R. Papa St., Sampaloc, Manila, Philippines

PROFES Department of Accountancy

ED Accounting 17 – Synthesis Report 2

Dr. Alfredo M. Joson, CPA

with the said profession.

Professional accountants manage the private monetary subtleties of individuals and

Definition of Key Terms

1. Standard – something established by authority, custom, or general consent as a model,

example, or point of reference the quality of the reasonable person.

- Something established by authority as a rule for the measure of quantity, weight,

extent, value, or quality.

2. Accountancy - Accountancy is that the practice of recording, classifying, and reporting

on business transactions for a business. It provides feedback to management regarding

3. Accountant - The term accountant refers to knowledgeable who performs accounting

testing requirements, these professionals are certified by national professional

4. Independence - The state or quality of being independent; freedom from dependence;

exemption from reliance on, or control by others; self-subsistence or maintenance;

direction of one's own affairs without interference.

5. Objectivity - In philosophy, objectivity is that the concept of truth independent from

objectivity refers to the flexibility to evaluate without partiality or external influence.

integrity is considered the honesty and truthfulness or accuracy of one's actions.

7. Confidentiality - Confidentiality involves a collection of rules or a promise usually

executed through confidentiality agreements that limits access or places restrictions on

certain varieties of information.

8. Professional Competence - the aptitude to perform the duties of one's profession

generally, or to perform a selected professional task, with skill of a suitable quality.

9. Professional Behaviour - Professional behaviour may be a variety of etiquette within the

workplace which is linked primarily to respectful and courteous conduct. Believe it or

reasonably be expected to try to under particular circumstances.

There are certain standards that professional accountant should follow/comply:

legitimate in all expert, furthermore, business connections. Integrity likewise infers

reasonable managing and honesty/uprightness.

- To be straightforward and honest in all professional and business relationships.

- A professional accountant will not purposely be related with reports, returns,

o Contains a substantially bogus or deluding explanation;

o Contains articulations or data outfitted foolishly; or

o Omits or darkens data needed to be incorporated where such exclusion or lack

of definition would be deceiving.

- The rule of objectivity forces a commitment on all professional accountant not to

compromise their expert or business judgment.

- A professional accountant might be presented to circumstances that may weaken

objectivity. It’s unfeasible to characterize and recommend every such circumstance.

A professional accountant won’t play out an expert assistance if a situation or

relationship predispositions or unduly impacts the accountant’s proficient judgment

concerning that administration.

Professional Competence and Due Care

obligations on all professional accountants:

o To keep up proficient information and aptitude at the level needed to

guarantee that customers or managers get skillful expert help; and

o To act constantly as per material specialized and proficient guidelines while

offering proficient types of assistance.

information and aptitude in the exhibition of such administration. Proficient ability

might be partitioned into two separate stages:

o Attainment of expert skill; and

o Maintenance of expert capability.

- The support of expert skill requires a proceeding mindfulness and a comprehension of

applicable specialized, proficient and business improvements. Proceeding with

proficient advancement empowers a proficient bookkeeper to form and carry on the

skills to perform ably inside the expert climate.

- Diligence encompasses the responsibility to act in accordance with the requirements

of an assignment, carefully, thoroughly and on a timely basis.