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ETHICS IN PROFESSION

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How did that feel? Did some of the arguments make more of an impression on you than others?
We’re all different, and people can behave well for a number of different reasons. For many people,
it makes a big difference whether somebody behaves well because they feel in the mood to do so,
or expect to get a reward, or are compelled to do so by outer forces, or because they want to
comply with their moral conscience.

Ethics is a branch of philosophy that studies the difference between right and wrong. As professional
accountants, you will have many opportunities to choose between right and wrong. And as you have
seen in the business press, making the wrong choice can lead to serious consequences including
corporate failure, loss of reputation, fines, and even jail sentences.

Perspectives on ethics
In very broad terms, there are three ways of looking at ethics that have developed over time: rules
conformance, good intentions, and competence.

One way of thinking about ethics is in terms of conformity to rules. From this perspective, ethics is
understood as a list of things to do and to not do. Sometimes the list gets very long and
complicated and needs to be interpreted by a whole institution of people. The ethical person, from
this perspective, is the one who conforms to the rules.

A second way of thinking about ethics is in terms of good intentions. From this perspective, a
behaviour is considered ethical if it is based on good intentions. Good behaviour then follows from
good thinking.

The third perspective thinks of ethics in terms of competence. From this perspective, the ethical
person is one who can make decisions based on principles and then act on them. This perspective is
thought of as looking at competence, because ethics is thought of in terms of an ability rather than
an attitude.

Branches of ethics
As a subject of scholarly study, ethics sits among other branches of philosophy like metaphysics (the
study of the nature of reality), epistemology (the study of what can be known and how we know
about it), aesthetics (the study of concepts like art, music and beauty) and logic (the study of
reasoning and methods of arguing).

Over centuries of philosophical debate, ethics has developed several schools of thought. In other
words, philosophers and others have developed different ethical theories, different ways of thinking
about ‘doing the right thing.’ These theories reflect scholarly differences between professional
philosophers, but they also reflect differences in style of moral reasoning that can be observed in
everyday moral reflection. As a professional accountant working with people, it will be important for
you to become aware of your own ethical way of thinking, and to understand that other people may
think about doing the right thing in a different way from you. Some of the better known ways of
thinking about ethics follow, in no particular order.

The accounting examples included here are only used to illustrate new concepts for you using
familiar terms. When making any decision as a professional accountant, you must be sure that you
are following the laws of your country, the particular rules that govern you, and the ACCA
fundamental principles.

our duty to others
One way to think about ethics is to acknowledge that there are things that someone just does not
do, as part of a duty to others. A limitation of this principle is that you have to decide what those
things are that someone should not do.
At least one philosopher (Immanuel Kant) has defined those duties by saying ‘act according to
principles that everyone could follow.’ For example, if you disobey traffic lights, you should consider
what would happen if everyone did so. The point is that we should recognise everyone as equals,
and not assume that the rules are any different for ourselves than they are for other people.

As an accounting example, a professional accountant would not deliberately issue false or inaccurate
financial statements. If everyone did so, no statements could be trusted and as a consequence not
only would the profession be brought into disrepute, but all financial statements would have no
value to their users. Ultimately the need for accountants and for financial reports would be called
into question.

Consequences
Another way of thinking about ethics is based on thinking about the consequences to different
people. Briefly, consequentialism encourages you to make decisions based on the consequences —
both positive and negative — for those involved.

This category of thinking is the branch of ethics known as utilitarianism. This states that an action is
right if it leads to the most good outcomes and the least bad outcomes for the greatest number of
people.

One limitation of thinking about ethics in terms of consequences is that you have to agree on what
sorts of consequences matter: for example, should you be trying to promote pleasure and avoid
causing pain, or should you instead focus on promoting people’s actual well-being, regardless of
whether doing so makes them happy?

A modern application of this point of view is the cost-benefit analysis, which involves assigning
monetary values to the costs and benefits of an action and seeing how they add up. This practice is
often used in evaluating new projects.

As an accounting example, an accountant thinking in terms of consequences would prepare ‘true
and fair’ financial statements because doing so would bring the most benefit to the greatest number
of people. In other words, stakeholders inside and outside the organisation would be able to make
more informed decisions as a result.


Virtue theory
In virtue theory, the emphasis is on deciding what sort of person one should try to be, and to define
the virtues such a person would embody. You decide what makes a good person, instead of what
makes a good action, and act accordingly.

One limitation of this way of thinking is that what constitutes a virtue must be agreed upon, and it
can vary by culture and over time. For example, the qualities of good financial reports were once
considered to be completeness, historical accuracy, reliability and strict adherence to the legal form
in disclosing business transactions. More recently, the qualities of good financial reports have come
to be relevance for decision-making, reference to a wider conceptual framework, and presenting the
economic substance of business transactions.

As an accounting example of the use of virtue theory, in deciding whether to agree to a client’s
request to use a questionable method for valuing inventory, an accountant would ask, ‘What would
a conscientious accountant do in such a situation? What would one of my respected mentors do?’

social contract theory
The social contract theory of ethics advises you to think about ethics as embodying a set of rules
agreed upon by reasonable people to bring order to social living. So when making an ethical
decision you ask yourself, ‘What rule would reasonable, unbiased people agree to?’ You then follow
such rules, regardless of whether they benefit you in particular situations.

One criticism of this theory points out that the agreement referred to by social contract theory is
entirely imaginary. Why consider yourself bound by an agreement that never happened?
An accounting example of social contract thinking might be seen in a situation where an accountant
has to decide between loyalty to a client and candid assessment of financial statements. Both of
those options involve important social values. Thinking in social contract terms, the accountant
might ask, ‘What sort of rule for balancing these values would unbiased people agree to?’

Confucian ethics
Confucian ethics seeks to provide harmonious relationships within society, the family, and the
individual. Looking within yourself and learning from experienced people are seen as the main roads
to wisdom and self-harmony. The emphasis on experience leads to respect and reverence for the
past, the aged, and for one’s ancestors.

One of the criticisms of this model is that in a society where relationships are considered more
important than the laws themselves, corruption and nepotism may be tolerated.

As an accounting example, in deciding whether to agree to a client’s request to use a questionable
method for valuing inventory, an accountant thinking in Confucian terms might consider agreeing to
it because doing so would cause harmony with the client.

Rules of thumb
In addition to scholarly branches of philosophy, some other ways of looking at right and wrong have
developed.

The golden rule

The classic golden rule is to ‘do unto others as you would have them do unto you.’ In other words, ‘I
will not cheat that person because I do not want them to cheat me.’

The golden rule is a simple and useful tool, but it does have some limitations. We don’t really know
how babies or animals want to be treated, for example, so the golden rule can’t tell us much about
how to treat them. Also, the whole rule is based on your own feelings of how you yourself would
want to be treated. But your own needs and preferences might not be typical. For example, the fact
that you personally do not value privacy does not mean that you don’t owe others an obligation to
respect their privacy.

As an accounting example, this rule of thumb could be applied to mean that you disclose all
information that may be relevant in financial reports because, if you were the reader of those
financial statements, you would expect to receive all the information, and disregard any that is not
relevant to you.

Mirror Test
Another rule of thumb is the mirror test. This is a quick way to evaluate a decision that you are
about to make, and reinforces the notion that you are responsible for your own actions. Imagine
you’re looking in a mirror and ask yourself:

Is it legal?

If it is not legal, don't do it.

What will others think?

Others meaning a friend, a parent, a spouse, a child, a manager, the media, or someone else
whose opinion is particularly important to you.

As an accounting example, in deciding whether to agree to a client’s request to use a questionable
method for valuing inventory, an accountant thinking in terms of this rule of thumb would consider
how a story about this action would look on the front page of the local newspaper.
Ethics and morality
It is worth noting that two different words – ethics and morality – tend to arise when ethical issues
are discussed. Morality, like ethics, is about the principles we use to judge the right and wrong of
our actions. The technical difference is that while morality consists of the various principles that
guide our decisions, ethics is the careful, methodical, and scholarly study of which principles should
guide our actions. For most purposes, the words can be used interchangeably so we can speak of
having either ‘ethical obligations’ or ‘moral obligations’.

Ethics and religion
For some people, religion plays an important role in their moral beliefs and moral reasoning.

If you belong to a faith-based community, you may have learned ethical behaviour from the
religious leader in your church, temple, mosque, synagogue, or other place of worship. That
experience provides you with another point of view to approach decision-making at work.

Even if you do not belong to a faith-based community, you should be aware that some people do,
and may bring their religious beliefs to a business discussion of ethics.

It is important to remember that secular ethical perspectives such as those discussed in this unit
need not always conflict with religious beliefs. Most, if not all, religions contain some direction about
treating other people fairly, and that is also the premise of most ethical models. It is also seen as
good business practice.




ethics and maturity
There is a theory of moral development which says that people move through six stages. This
theory was popularised by Lawrence Kohlberg based on his research studies conducted at Harvard’s
Center for Moral Education.

His theory of moral development was dependent on the thinking of the Swiss psychologist Jean
Piaget and the American philosopher John Dewey. These men said that human beings develop
philosophically and psychologically in a progressive fashion as they grow up.

In stage one, people are concerned with obedience and punishment and the immediate results to
themselves. The question they ask themselves is, ‘Will I be punished if I do this?’.

In stage two, people are still concerned about the consequences, but have moved on to thinking
about what else is in it for them. They think, ‘You do a favour for me and I’ll do a favour for you.’

In stage three, people begin thinking about their social relationships. They want to be a good person
so that they can seek approval from others.

In stage four, a functioning society is paramount, and people seek to obey laws and social
conventions. If one person violates a law, perhaps everyone would, so there is an obligation to
uphold the law.

In stage five, people think in terms of inalienable rights and liberties. Laws are seen as embodying
social contracts, and such contracts are open to criticism. People at this level are interested not just
in what society’s rules are, but in what makes a good society.

The theory says that people rarely reach stage six. If they did, they would show respect for
universal principles and the demands of individual conscience, acting because it is right, not
because it was legal or expected of them.

Although this theory of moral development has been criticised for being overly concerned with
abstract principles such as justice, and not enough with care, it is still a useful framework for
investigating your personal ethics
ethics and the Professions
Historically, most professions like medicine and law had codes of ethics and members were required
to swear an oath to uphold those codes, thereby ‘professing’ to a higher standard of responsibility.

In modern times, membership of a profession is usually restricted and regulated by one or more
professional associations, and rigorous training and additional schooling is required. Professionals
typically proclaim an obligation to society beyond their client relationship, and point to a code of
ethics that they follow.

So as a professional accountant with a code of ethics, you will form part of a long tradition of people
who ‘profess’ to a higher standard of accountability. You will also enjoy a position of trust and
responsibility. This is perhaps most obvious in the role accountants play in auditing publicly traded
companies. Although the client company pays the bills, your highest obligation is to the public good,
and in particular to the investing public that will be relying on the accuracy and integrity of your
work.

WHAT IS ETHICS?

Summary
Morality is a set of rules concerning right and wrong behaviour. Ethics is the branch of philosophy
that attempts to provide clear arguments about which moral rules are best and how those rules
ought to be interpreted.

There are several different ethical theories or frameworks for ethical decision-making, each of which
has been advocated by prominent moral philosophers. Some philosophers, for example, advocate
thinking about ethics entirely in terms of consequences: what action will produce the best outcomes
overall? Others have argued in favour of thinking solely in terms of duties, and absolute principles of
behaviour – such as ‘Always tell the truth’ – that could be adhered to by all. Still others have
advocated thinking about ethics in terms of hypothetical contracts, asking us to imagine what rules
of behaviour reasonable, unbiased people would agree society should live by. And finally, some have
argued that we ought not to think about ethics in terms of rules, but rather to think about what
kinds of virtues good people embody, and what kinds of people we think it best to emulate.

Many different factors affect ethical reasoning, including age, sex, religion, and professional
affiliations.

It is preferable that your ethical decisions be based on good reasoning and careful consideration of
the relevant laws and principles, but it is also necessary to be aware of the various personal factors
affecting your own decision-making, and those of other people.

Rules vs principles
The objective of this unit is to introduce you to the two major approaches to solving ethical
dilemmas: one based on rules, and one based on principles.

ACCA follows a principles-based approach, and that is the approach we recommend that you take as
a professional accountant.

An example
The following simple example is used only to illustrate the use of a rule and the use of a principle.

If you were following a rules-based approach and you were asked to act for two clients who are in
competition with each other, you would check the rulebook to see if what you were planning to do
was prohibited. If there was no specific rule against it, you could go ahead and act for both of them.

On the other hand, if you were following a principles-based approach and you were asked to act for
two clients who are in competition with each other, you would first think of the governing principles.
You would determine if any of them would be threatened if you did what you were asked to do. If no
principle would be threatened, you could go ahead and act for both of them. Alternatively, if threats
were identified, you would have to assess the significance of those threats, and then consider
whether any measures could be put in place to address them.
RULES VS PRINCIPLES

some differences between the two
One of the differences between the two approaches is that in a rules-based approach, you look for a
rule that prohibits you from doing whatever it is you are considering. In a principles-based
approach, you have to think more widely and consider whether or not a principle is being violated or
even threatened.

In many ways the principles-based approach is more reliable in that if an action is planned, its
appropriateness is assessed. If it goes against the principles of professional behaviour and values,
then the action should be avoided, even if no rules exist concerning this specific action.

Another difference is the onus of responsibility. In a rules-based approach, someone in authority has
to create a list of prohibited activities for you to obey. In a principles-based approach, the
responsibility is on you, as a professional, to decide if, in each specific case, a principle is being
violated.

It is difficult to have a written rule that covers every possible situation. Furthermore, in a rules-
based approach, people sometimes start looking for loopholes. They look for situations that are not
prohibited and use them to their advantage. This is what happens in taxation where tax rules are
established but accountants look for loopholes in order to avoid tax.

A principles-based framework is a more flexible approach, and can cover new situations that might
not have been thought of. It can sometimes seem more difficult, however, because you need to
carefully think through every situation.

summary
As a professional accountant, you will be called upon to make many decisions. Remember that ACCA
follows a principles-based approach.

It is important to put principles into context. You must always obey the laws of your country. Then
you must consider the more detailed rules laid down by your governing body (ACCA) regarding a
specific situation such as promoting your practice, charging fees, accepting new clients, or handling
clients’ monies.

Finally, if a particular ethical dilemma is not covered by ACCA’s rules, you must consider the
fundamental principles, and whether they might be breached or threatened by the proposed course
of action.

ABOUT ACCA'S FUNDAMENTAL PRINCIPLES

About ACCA's fundamental principles
The objective of this unit is to introduce you to ACCA’s fundamental principles:


    •   Integrity


    •   Objectivity


    •   Professional competence and due care


    •   Confidentiality


    •   Professional behaviour

As a human being, you and your ethics are shaped by your upbringing and your experience. As a
professional accountant or student accountant, you are bound by the laws of your country, and all
regulations that flow out of them. As an ACCA member, student, or affiliate, you are also bound by
the fundamental principles of ACCA.

Section 3.2 of the ACCA Rulebook contains the full text of these principles. These principles are
based on standards from IFAC, the International Federation of Accountants which apply to
accountants around the world. What follows is an explanation of these principles.

integrity
What the rulebook says

You 'should be straightforward and honest in all professional and business relationships.'

In other words

Do not lie and do not issue false or misleading information

objectivity
What the rulebook says

You ‘should not allow bias, conflicts of interest or undue influence of others to override professional
or business judgements.’

In other words

Your professional and business judgement should be based on fact and on what is in the best
interests of stakeholders or others. Judgement should not be based on what is in your own personal
interest, or in the interests of those who have power or influence over you.

professional competence and due care
What the rulebook says

You ‘have a continuing duty to maintain professional knowledge and skill at a level required to
ensure that a client or employer receives competent professional service based on current
developments in practice, legislation and techniques.’

and

‘Members should act diligently and in accordance with applicable technical and professional
standards when providing professional services.’

In other words

Only perform work if you are competent to do so. Keep up to date with accounting matters. Do not
forget that as an ACCA member, you will have continuing professional development (CPD)
responsibilities – and you must ensure that you are keeping up to date.

confidentiality
What the rulebook says

You ‘should respect the confidentiality of information acquired as a result of professional and
business relationships and should not disclose any such information to third parties without proper
and specific authority or unless there is a legal or professional right or duty to disclose.’

and

‘Confidential information acquired as a result of professional and business relationships should not
be used for the personal advantage of members or third parties.’

In other words
Do not talk about your clients, or use information that you have learned about them for your
personal gain or for the gain of others. Maintain your silence even after the professional relationship
with the client ends.

professional behaviour
What the rulebook says

You ‘should comply with relevant laws and regulations and should avoid any action that discredits
the profession.’

In other words

Be courteous and considerate to people, and always behave so that a ‘reasonable and informed
third party’ who knows all the facts would also think you are acting professionally.

Summary
The fundamental principles of integrity, objectivity, professional competence and due care,
confidentiality, and professional behaviour are international standards that accountants who are
members of IFAC professional bodies agree to follow through implementation of the IFAC Code of
Ethics.

Professing to higher standards of behaviour is something that professionals do. And these are the
standards that ACCA accountants must follow. As a student, it is important for you to become
familiar with them and to know that they also apply to you.



The Framework
The objective of this unit is to introduce you to the framework for using ACCA’s fundamental
principles for solving ethical dilemmas.

Because it would be difficult to create a rule for every possible situation that you might encounter,
and even more difficult to remember the right rule at the right moment, ACCA uses a principles-
based approach, and has developed a framework to help you address those principles.

The ACCA framework is based on the model from the International Federation of Accountants
(IFAC). It consists of a series of steps that you go through when confronted with an ethical
dilemma. You should ask and answer these questions in this order:


    1.   What is the real issue here?


    2.   Are the fundamental principles threatened?


    3.   Is the threat significant?


    4.   Are there safeguards that can eliminate the threat, or reduce it to an acceptable level?

You will explore each of these steps in more detail.




Step one: what is the real issue here?
Sometimes the real issue is obvious. Sometimes, the issue is not obvious and you have to ask a lot
of questions before you find out what the issue really is.

As a start, you can ask yourself these questions:
    •   Is this my problem, or does it belong to someone else?


    •   Is it the real problem or part of a larger one?


    •   Is this a real problem or am I only avoiding a difficult task?


    •   Do I need more information?

For example
You are the accountant at a pharmaceuticals company. Your finance director asks you to contact
the marketing director about the implications of a significant and unexpected price increase of a
generic drug you produce for thinning the blood in heart patients. The request follows a pricing
agreement drawn up between the three main companies supplying these drugs to the national
health service of a country, and so the impact of the price increase on the volume of sales will be
lessened, due to the other companies in the cartel also raising their prices.

Is this your problem?

You might think ‘no’, because you have not been involved in the company’s decision to fix the drug
price, nor brokered the agreement with its main competitors. On the other hand it could be your
problem, since doing this could be seen as condoning a potentially illegal arrangement. If not strictly
illegal, the agreement could be considered to be unethical as it is detrimental to the tax payers of
the country who finance the national health service through taxation.

Is being asked to discuss the price increase with the marketing director the real problem?

No. It is part of a larger problem – namely coming into possession of knowledge of a wider
conspiracy of a serious nature, in other words, that a cartel is being operated and that price-fixing is
taking place which you are being asked to help implement. The problem you face is that if you go
along with it you are aiding and abetting an illegal process, or if you do not go along with it there
may be career implications or other problems for you in the future.

Is this a real problem or am I avoiding a difficult task?

The problem certainly exists in this case, but rather than just helping to implement the price change
and ignoring the wider issue, or refusing to do so, you should sit down to discuss the larger problem
with the finance director. You should try and establish the reason for the price-fixing arrangement
and question its legality as well as its ethics.

If the situation gets difficult, there may be a need for you to find out more about your options.
Where you feel pressured to act against your professional judgement or feel you should act on
information that you have about illegal or unethical behaviour, you might need to discuss this with
your solicitor or your professional accounting association. You may need to consider alerting
appropriate authorities about this arrangement, in other words to consider the act of
‘whistleblowing’ and all its wider implications for you, your organisation, and its stakeholders.




6. THE FRAMEWORK

Step two: are the fundamental principles threatened?
You already know the fundamental principles of:


    •   Integrity


    •   Objectivity
    •   Professional competence and due care


    •   Confidentiality, and


    •   Professional behaviour

Is one or more of these principles being compromised, and in what manner?

Sources of threats
The threats to these principles can come from a number of different directions.

Self-interest threats
These come about if you or a close family member stands to gain (or not lose) something from the
incident. Usually your integrity or objectivity would be at risk.

Self-review threats
These may be significant when you are in a position of having to review your own work. This could
put your objectivity at risk.

Advocacy threats
These threats exist if you are promoting a position that compromises your integrity, or promoting a
position or opinion to the point that subsequent objectivity may be compromised.

Familiarity threats
These can arise if you have a close personal relationship with someone and cannot be objective.
Several of the fundamental principles may be threatened.

Intimidation threats
These can become significant if you put yourself in a position where you could be pressurised by
physical or verbal threats, or if there is an implied threat to your career or prospects. For example,
you may be bullied into doing work which you are not competent to perform. Any of the principles
could suffer under this type of threat.

Step 3: is the threat significant?
Determining the significance of a threat depends on the individual situation. Only you or a
‘disinterested third party’ who knows all the facts can decide whether the threat is significant.

You must always consider what others would make of the position and your actions. The
‘disinterested third party’ is a phrase that is often used in these situations. It is the theoretical voice
of reason you would consult to help you gain perspective on an issue

Step four: are there safeguards that may be put in place?
If a threat is significant, you will want to put safeguards in place or use the ones that already exist.
For example, safeguards can range from government regulations and professional standards, to
people or policies in your workplace. If you look around, you will see that many safeguards are
already in place to help you.

First, there are the safeguards created by laws and regulations in your country and by your own
accounting profession. These are designed to ensure that all accountants work in line with the
fundamental principles, that compliance with the fundamental principles is regulated, and that
sanctions are imposed on those professional accountants who do not comply.

The next safeguards are the education and training you undergo before entering the profession and
the continuing professional development requirements you face after you qualify as an accountant.
This training teaches you current practices and helps keep you up-to-date with accounting
standards and regulations.
These safeguards can be reinforced by controls established in the work environment. These can
include the introduction of organisational ethics policies and procedures and the development of
training for all employees to ensure their compliance; strong internal controls; appropriate
disciplinary procedures; and a culture that encourages employees to communicate to senior levels
about ethical issues without fear of retribution.

Finally, there are safeguards you can create for yourself such as complying with continuing
professional development requirements; keeping records of contentious issues and how the
individual addressed them; using an independent mentor; and using the services of legal advisors
and professional bodies.

When you make a decision on a course of action you propose to take, you should be able to point to
the principle or principles being threatened and the nature of the threat. You should also be able to
point to the safeguards in place to reduce the threat to an acceptable level and allow the proposed
course of action to go ahead. If you cannot recognise an existing safeguard, or implement an
appropriate safeguard, you should refuse to carry out the activity in question.




6. THE FRAMEWORK

An example
Let’s work through a simple example. Suppose your manager asks you to claim expenses under a
code other than that relating to the expenses incurred, on the grounds that this budget code is
under spent and the original code was overspent. Use the framework.

Step one: What is the real issue? It is not that you are claiming expenses fraudulently, because
these were legitimately incurred and so you are not benefiting financially. The issue is whether
financial and budget information and variance analysis are reliable when managers are manipulating
the use of budget codes. The incorrect allocation of the expense could result in senior management
being deliberately misled.

Step two: Are any fundamental principles threatened? You remember the five principles of
integrity, objectivity, professional competence and due care, confidentiality, and professional
behaviour. The fundamental principles threatened here are integrity and objectivity – deliberately
using a wrong code to protect your personal and business interests.

Step three: How significant is the threat? Since you have not acted dishonestly for personal gain,
you might decide that the threat is not very significant. However, you are thinking about the
consequences and not the threat. You are also ignoring the possible consequence that senior
management may be deliberately misled as a result of your actions. If the amount being allocated
to the incorrect code is considered material, the risk of this happening is significant, unless
appropriate safeguards are put in place.

Step four: What safeguards would ensure that the threat to your integrity is sufficiently low and
that budgetary codes are not dishonestly manipulated? One safeguard that might allow the
proposed action to go ahead is to discuss the situation and seek assurances that the treatment of
the expenses claim will be disclosed to the users of the information.

You may decide to obey your manager’s request and use an incorrect budget code, whilst striving to
protect the budget holder’s position. That is you may do so because you have received assurances
that the proposed action will not result in the senior management being misled. On the other hand,
you may feel that as a professional accountant, it is your duty to report expenses as they are,
because you feel that the proposed course of action could only mislead senior management.

What is your decision? Do you have sufficient assurance that the first course of action may be
followed, or do you have to refuse the manager’s request?
Professional ethics and your personal VALUES
You have now examined your own personal values and learned about ACCA’s fundamental
principles. At this point you may well be wondering how the two fit together. This section will
attempt to explain.

In any situation, you must begin with the laws of your country. The law generally deserves our
respect, with very few exceptions. The situations in which it might be ethically permissible to break
the law generally involve matters of life and death, and are not likely to occur in the professional
work of accountants.

Next you look to the specific rules that govern the situation. For example, if you are an auditor, you
will be bound by the relevant auditing standards in your jurisdiction.

Then as a professional, whether an auditor or not, you must consider the principles of your
professional body which form the basis of your professional ethics.

Remember that professional ethics is really about an obligation to the public. As a professional --
whether a doctor, a lawyer, an engineer, or an accountant -- you will have been tested and accepted
by your profession. The public will place their trust in you simply because you are a professional, a
member of a trusted professional body. The public is not expected to know how to assess either the
ability or the ethics of a doctor, a lawyer, or an accountant, for example. They trust that the
professional bodies will have done this for them. This means that as a professional you owe the
public a certain level of integrity and objectivity -- as well as professional competence and due care,
confidentiality, and professional behaviour. In other words, you must uphold the ACCA fundamental
principles simply because you are a professional and you have professional ethics.

Throughout all of this, your own values, interests and experiences are the filter through which you
unavoidably view any situation. It is important for you to be aware of those filters because they
could influence your professional judgement. That is why this module has exposed you to different
kinds of ethical thought, so that you may be better able to recognise your own personal ethical
perspective when you exercise your professional ethics.

For example, suppose you tend to make decisions based on the consequences to other people and
would generally consider yourself a utilitarian. If you were asked to do something that was legal and
did not violate the fundamental principles, but had unpleasant consequences for a large number of
people, you might not want to do it. For example, you may not wish to advise a client that a loss-
making division of the business should be closed, making several workers redundant. It would
violate your preferred ethical framework. But it would not violate your professional ethics.

It is important to be able to know the difference between the two. As a professional accountant, you
should strive to maintain objectivity by being mindful of the fact that your personal values are just
that – personal and unique to you.

Summary
ACCA has a framework for ethical decision making. It consists of four steps. First you determine the
real issue. Then you determine if any of the fundamental principles are threatened. Next you
determine if the threats are significant. And finally you see if you can put safeguards in place.

You should think of ACCA’s fundamental principles as your professional ethics. As an accountant you
have an obligation to the public, as do other professionals, and the obligation consists of upholding
those fundamental principles.

It is important to know yourself and your ethics, so that you are better able to distinguish your
personal ethics in a business situation.
A framework for making decisions
Ethics and gender
Some researchers have questioned whether men and women approach ethics in a different way.
There is considerable debate over such an idea. See what you think by taking this quiz.

Ethical style questionnaire: please answer the following 9 questions...
1. Which is worse?

     hurting someone's feelings by telling the truth

     telling a lie and protecting their feelings

2. Which is the worse mistake?

     to make exceptions too freely

     to apply rules too rigidly

3. Which is it worse to be?

     unmerciful

     unfair

4. Which is worse?

     stealing something valuable from someone for no good reason

     breaking a promise to a friend for no good reason

5. Which is it better to be?

     just and fair

     sympathetic and feeling

6. Which is worse?

     not helping someone in trouble

     being unfair to someone by playing favourites

7. In making a decision you rely more on

     hard facts

     personal feelings and intuition

8. Your boss orders you to do something that will hurt someone. If you carry out the order, have
you actually done anything wrong?

     yes

     no
9. Which is more important in determining whether an action is right or wrong?

     whether anyone actually gets hurt

     whether a rule, law, commandment, or moral principle is broken

To view your score, click here.

CASE STUDY - IAIN'S DECISION

Feedback for making the adjustments

Your choice
You agree to make the adjustments and to try to justify them without proper evidence.

Feedback
The key problem with this choice is that it violates ACCA’s fundamental principles. By making these
unsubstantiated adjustments, you would not be living up to the standard of integrity, objectivity,
and professional competence expected of a professional accountant. You have violated your
professional ethics.

Reasons behind your decision
Your decision to make the adjustments may be rooted in a simple desire to avoid conflict and
protect your own interests. Such desires are quite natural, but a conscientious professional needs to
guard against letting such desires override his or her judgement. In the present case your own
interests conflict with the ethical obligation to uphold the technical and ethical standards of the
accounting profession. You should recognize that making these adjustments without proper
evidence is not good accounting practice, and likely falls below the standard of honesty expected of
you.

Your choice to make the adjustments might have been rooted in ethical principles. In particular, you
may have chosen to make the adjustments because of a well-intentioned desire to reduce conflict
and to show your loyalty to the company. Loyalty is indeed a virtue, as is being a team player.

But it’s important to remember the limits of those virtues. Being loyal is important, but managers
like Margaret should know that accountants are professionals, with special obligations that go
beyond loyalty to the company. Thus, loyalty to the company must be balanced against loyalty to
the profession and the need to uphold ACCA’s fundamental principles.

Also, it is important for you in this situation to consider what the consequences of making these
adjustments would have in the long run. Making the adjustments may not seem like a big deal in
the present case, but going along with the request now may open the door for being pressured to
engage in further violations of ACCA principles in the future.

The bigger picture
Of course, in real life Iain would have more choices available to him than to simply make the
adjustments or refuse to make them. It may have been useful for him to explain to his manager in
greater detail why making the adjustments would be problematic, and the implications that doing so
could have for him in terms of professional censure.

He might also have considered speaking to a more senior accountant either within the company or,
with due caution and attention to confidentiality, outside the company. The kind of pressure Iain is
facing is not uncommon, and the advice of a more experienced accountant might help him find a
creative alternative.

It is also worth considering whether past behaviour on Iain’s part led Margaret to think he would be
willing to go along with her plan in the present situation.
Feedback for not making the adjustments

Your choice
You refuse to make the adjustments and argue a case for valuing the various assets on the basis of
your professional judgement. You uphold your professional ethics.

Feedback
You are upholding the fundamental principles of integrity and objectivity. You are not allowing your
judgement to be clouded by peer pressure, by your own personal interests, or by the short term
interests of your company.

Reasons behind your decision
Hopefully, you decided to do this because you know it is the right thing to do as a professional. Or
perhaps there has been pressure from your manager on other occasions to make decisions that
make you uncomfortable. This time you have decided that you will not go along with her request.

In this case, your choice to make the adjustments could have been rooted in ethical principles. For
example, you may have made your decision thinking of your duty to others. If everyone adjusted
and re-adjusted financial statements without regard to valid evidence, then the whole idea of
financial statements would be invalidated.

However it is interesting to note that if you relied on other ethical viewpoints, you might not have
made this decision. For instance, some would argue that it fails from the utilitarian perspective,
because your decision might seem not to have produced the most pleasure for the greatest number
of people. In fact, it seems likely to make most stakeholders unhappy.

The bigger picture
Your decision does not make people happy, and it would have personal, professional, and career
consequences for Iain. His career prospects at Bexall’s may be damaged, he may have a difficult
performance appraisal from his manager, and he may even need to look for a job elsewhere. The
only parties happy with his decision, aside from himself, would be the bank who would otherwise be
misled, and the potential shareholders.

Outside of the black-and-white choice presented in this learning exercise, Iain might have been able
to consider even more options and might have dealt with the situation differently.

For instance, he could have decided to be even more courageous and persuasive with his boss and
articulated more forcefully the dangers to her and to the directors of trying to mislead the auditors.
He could have argued that as a professional, he has an overriding obligation to act in accordance
with accounting standards and the fundamental professional principles and therefore could not
possibly agree to these adjustments.

He could also speak confidentially to his professional association’s advisory help line for advice. The
help line would confirm that he should not go against fundamental accounting principles and would
remind him of his professional obligations.
From: gli@putnamrhodes.com
Sent: Mon 14 Aug 2006 9.55
To: bremen@Bexall.com
Cc: tosula@putnamrhodes.com
Subject: Remuneration Committee

PRIVATE AND CONFIDENTIAL

Dear Berndt,

In my role as Audit Manager for the Bexall audit, and as part of our responsibilities regarding
disclosure of director and executive remuneration, I wanted to check something out with you
regarding executive share options. I would therefore like some details regarding the following if
possible:


    •   What and how many share options are held by the CEO and any other directors?

    •   How do these work and when do they expire?


I would appreciate your cooperation on this enquiry.

Regards,

Gail Li
(Audit Manager, Putnam Rhodes)
From: bremen@Bexall.com
Sent: Mon 14 Aug 2006 10.35
To: gli@putnamrhodes.com
Cc:
Subject: RE: Remuneration Committee

Dear Ms Li,

The CEO and the CFO hold share options on 50,000 shares and 30,000 shares respectively. These
were all offered to these executives in 2003 subject to a strict waiting period lasting until 1st
January 2006. From that date a two-year vesting period, during which the executives could exercise
their options began, which will end on 31st December 2007. These share options were originally
approved by the committee in 2002 in order to align executives’ interests with the interests of the
shareholder. The grant or ‘strike’ price for all of these shares was set at $7.50 and the current share
price is $8.25. Unsurprisingly, none of these options have as yet been exercised, presumably in the
hope that the share price might rise to a point where it’s worth their while to exercise the options.

There is of course a link between profit or EPS and the share price, and a lower reported profit or
EPS than the market expects could cause a severe mark down in the share price and might
seriously devalue these options, or make them worthless.

I hope this is helpful,

Regards

Berndt Bremen
(Chair, Remuneration Committee, Bexall Pharmaceuticals)



7. CASE STUDY - GAIL'S DECISION

Feedback for refusing to sign

Your choice
You refuse to sign the paperwork. This means that you do not agree to the compromise that was
reached between Preston Mondal and Eric Manning.

Feedback
You have upheld the fundamental principles of integrity, objectivity, and professional competence
and due care. You acted objectively all the way through the audit process, up to and including your
refusal to agree to the compromise. You acted with integrity in accordance with your professional
values and did not let your judgement be clouded by peer pressure or by your own personal
interests. In addition, your professional competence is seen to be intact. You identified and
understood technical issues regarding the financial accounts and communicated your views
effectively to your managers and to the client.

Reasons behind your decision
Presumably you have chosen this course of action because you knew it was the professional thing to
do. Or perhaps you decided to take a stand against a course of action that you knew could have
unpleasant consequences for you as you continued your career in other organisations. Whatever the
reason, you showed courage in standing up to your manager.

If your choice was rooted in ethical principles, you may have reached this decision by thinking of the
social contract viewpoint - following the accounting rules means holding up your end of the bargain,
meeting society’s reasonable expectations of accounting professionals.
The bigger picture
In the real world, this would have been a difficult decision, and could have led to an unpleasant
scene. Gail’s job may have been jeopardised, or she may have been made to feel very
uncomfortable in her role. She may even have been asked to look for work elsewhere.

However, in the real world, Gail might also have had additional options, such as speaking to the
other partners in the audit firm and enlisting their support. There is probably a mechanism to
resolve such disputes within the firm. Even if such a mechanism does not exist, she should have
been capable of discussing the situation with the other partners, and if necessary, consulting the
technical advisory service offered by her professional body. This would have provided her with some
support when discussing her decision with the audit partner.
8. APPLYING WHAT YOU HAVE LEARNED

Questions

   1.   Financial accounting and reporting


        You are an accounts manager in a medium sized company. A day before the auditors are
        due to audit the company's accounts, your manager asks you to capitalise some research
        expenditures, so that they don't get expensed in the current year's income statement in
        order to boost profit.


        What do you do?

             Agree reluctantly, but ask for a reason so that you can explain it to the auditors.

             Refuse politely, explaining why.

             Agree reluctantly, but when asked about it by the auditors, explain that although you
             were aware of IAS 38, you were asked to expense the items by your manager.

             Ask your manager why, and make your decision based on the reason given.


   2.


   3.   Taxation


        You are a tax adviser to a corporate client, a multinational corporation which is thinking of
        significantly reducing the transfer price of a product produced in the country of Hi-tax by its
        manufacturing division and sold to its selling division in the country of Lo-tax. The price
        change is not related to any change in the cost base of the manufacturing division, but
        triggered by the recent increase in the corporate income tax rate in the country of Hi-tax.
        Apart from the price change reducing the tax liability of the company in Hi-tax, the change
        in price will also affect the corporate after-tax profit related bonuses of the executives of
        the two divisions.


        What would you do?

             Advise that this is a good idea and suggest that a further cut in price could be considered
             to save even more tax for the group.

             Advise that this decision is tax efficient but suggest that the bonus scheme for executives
             should be based on profits before tax and after a notional adjustment.

             Advise that without a change in the cost base, it is difficult to justify any price change as
             the consequences would be that the tax authorities in Hi-tax and the beneficiaries of
             these transfer payments would lose out and those in the other country would gain as a
             result.
          Advise that this is a good idea, but suggest that the resulting overall tax savings to the
          group should be shared more equitably amongst the executives of both companies.


4.


5.   Auditing


     As audit manager to a client supplying lifts, you notice that payments are made to a person
     who you know to be the Procurements Officer of a local authority which regularly purchase
     lifts and lift equipment from your client.


     What should you do?

          Discretely contact the Procurements Officer of the local authority and ask for an
          explanation for these payments.

          Seek permission from the local authority to contact the direct line manager of the
          Procurements Officer to ask him to investigate these payments with the Procurements
          Officer and report back.

          Ask your client what these payments are for and ask to see all the originating
          documentation before taking matters further.

          Discuss the discovery with your line manager and ask their advice about this, in case you
          do something inappropriate to damage your client and risk losing the audit contract or
          other associated contracts in the future.


6.


7.   Performance Management


     You are a newly promoted department manager and the head of your division asks you to
     submit budget requirements for your department. When you submit your travel expense
     budget to your head, he asks you to increase it by 25% saying that you need to build in
     some slack to cover unforeseen additional expenses and to ensure that your travel budget
     is not exceeded.


     What do you do?

          Agree, since your manager thinks this is appropriate behaviour, and it could be unwise to
          question his judgment.

          Ask your manager why he suggests such an increase, when you had already calculated
          your estimated travel needs and then agree, or not, on the basis of his answer.

          Refuse to do so, on the grounds that it cannot be justified.
          Contact the financial controller to tell him what your manager has asked you to do.


8.


9.   Financial Management


     You are a treasury manager in a computer equipment exporting business based in the UK.
     The company and its shareholders are profiled as risk averse. You are setting a pricing
     strategy for your sales manager. She is negotiating to win a major contract for the export of
     equipment to the government of a country which has a volatile currency against sterling.
     The payment will be made out by the government department to your company in the local
     currency in three months’ time. Your estimates give a 50% probability of a 0-20%
     devaluation of the local currency against sterling and a 50% probability of a strengthening
     of 0-20% of the currency against sterling over the next three months. There are also
     several local and international suppliers bidding for the contract against your company.


     What do you do?

          Inflate the normal price to the customer by 20% to compensate approximately for the
          maximum estimated exchange loss.

          Price the contract competitively in sterling and stipulate that the customer pays in sterling
          to protect your company against exchange loss risk.

          Price the contract competitively in local currency and accept payment in that currency in a
          year’s time on the grounds that on average the probability is that there will be no net
          exchange difference over the year.

          Price the contract competitively in local currency and agree a forward contract to
          purchase sterling in three months.
APPLYING WHAT YOU HAVE LEARNED

Feedback on your score

You scored 15

1. Financial accounting and reporting:
You are an accounts manager in a medium sized company. A day before the auditors are due to
audit the company's accounts, your manger asks you to capitalise some research expenditures, so
that they don't get expensed in the current year's income statement, in order to boost profit.

Your response was:

Ask your manager why, and make your decision based on the reason given.
This is a reasonable approach. It allows you to respond to your manager’s view, but it may indicate
that either you don’t know the answer or are not confident enough about your own judgement,
bringing into question your professional competence. In other words, you are relying on the opinion
of your manager and not on your own professional judgement. If you do know that an accounting
error has been made and are waiting for a lead from your manager, you are demeaning your
professional reputation by not making this known to your manager in the first instance.

2. Taxation:
You are a tax adviser to a corporate client, a multinational corporation which is thinking of
significantly reducing the transfer price of a product produced in the country of Hi-tax by its
manufacturing division and sold to its selling division in the country of Lo-tax. The price change is
not related to any change in the cost base of the manufacturing division, but triggered by the recent
increase in the corporate income tax rate in the country of Hi-tax. Apart from the price change
reducing the tax liability of the company in Hi-tax, the change in price will also affect the corporate
after-tax profit related bonuses of the executives of the two divisions.

Your response was:

Advise that without a change in the cost base, it is difficult to justify any price change as the
consequences would be that the tax authorities in Hi-tax and the beneficiaries of these transfer
payments would lose out and those in the other country would gain as a result.
This is a decision based on an ethical view of society and of wider societal responsibility, but is the
wrong decision from a business ethics perspective, especially for a professional tax planning
adviser. From one ethical perspective it is possible to argue that the artificial transfer price change
has implications for the tax authorities of the respective countries and for the recipients of transfer
payments who may indirectly suffer as a result of the company's decision. However, from a
business perspective, with the group's shareholders in mind (who ultimately reward you for acting
in their best interests) this decision does not fulfil your obligations.

3. Auditing:
As audit manager to a client supplying lifts, you notice that payments are made to a person who
you know to be the Procurements Officer of a local authority which regularly purchase lifts and lift
equipment from your client.

Your response was:

Ask your clients what these payments are for and ask to see all the originating documentation
before taking matters further.
This is the most appropriate approach, as you are professionally obliged to recognise that this may
be a situation where a conflict of interest, or something worse, exists. You are right to investigate
the payment and seek evidence of its nature through inspecting originating documentation and by
questioning your client about this before you report or discuss this with anyone else.

4. Performance Management:
You are a newly promoted department manager and the head of your division asks you to submit
budget requirements for your department. When you submit your travel expense budget to your
head, he asks you to increase it by 25% saying that you need to build in some slack to cover
unforeseen additional expenses and to ensure that your travel budget is not exceeded.

Your response was:

Ask your manager why he suggests such an increase, when you had already calculated your
estimated travel needs and then agree, or not, on the basis of his answer.
This is probably the most appropriate response, since you need to give your manager the
opportunity to explain his motivation for the request to increase the travel budget. For example, he
may have identified additional objectives or contingencies for the department which may have
associated travel costs. If you are satisfied that there are genuine business reasons for such an
increase you may then feel justified in making the budget change. However, if you are not
convinced by your manager’s answer you might need to question his decision further and argue the
case for not making the adjustment on wider business grounds. If you are unable to convince your
manager you may need to think about taking the matter further.

5. Financial Management:
You are a treasury manager in a large multinational business. You are setting a pricing strategy for
your sales manager. She is negotiating to win a major contract for the export of equipment
produced in the UK to the government of a country which has a volatile currency against sterling.
The payment will be made in the local currency in a year's time. Your estimates give a 50%
probability of a 0-20% devaluation of the local currency against sterling and a 50% probability of a
strengthening of 0-20% of the currency against sterling over the next 12 months. There are also
several local and international suppliers bidding for the contract against your company.

Your response was:

Price the contract competitively in sterling and stipulate that the customer pays in sterling to protect
your company against exchange loss risk.
This decision protects your company’s shareholders from any exposure to exchange rate risk related
to this contract. The problem with this approach however, is the inflexibility of the pricing strategy
and the increased risk of the contract being lost, where rival bidders, particularly local suppliers,
may not be expecting the customer to carry the whole exchange rate risk themselves. The decision
is likely to lose a good business opportunity for the company’s shareholders and to expose
employees to a risk of reduced working hours or possibly to a loss of jobs.
APPLYING WHAT YOU HAVE LEARNED

Feedback on your score

You scored 20

1. Financial accounting and reporting:
You are an accounts manager in a medium sized company. A day before the auditors are due to
audit the company's accounts, your manger asks you to capitalise some research expenditures, so
that they don't get expensed in the current year's income statement, in order to boost profit.

Your response was:

Refuse politely, explaining why.
This is probably the most appropriate decision, although you should be careful how you handle this
with your manager. You are demonstrating professional competence in recognising that research
expenditure should not be capitalised and you are being assertive in making it clear that as an
accounting professional you cannot put your name to recognising such an asset.

2. Taxation:
You are a tax adviser to a corporate client, a multinational corporation which is thinking of
significantly reducing the transfer price of a product produced in the country of Hi-tax by its
manufacturing division and sold to its selling division in the country of Lo-tax. The price change is
not related to any change in the cost base of the manufacturing division, but triggered by the recent
increase in the corporate income tax rate in the country of Hi-tax. Apart from the price change
reducing the tax liability of the company in Hi-tax, the change in price will also affect the corporate
after-tax profit related bonuses of the executives of the two divisions.

Your response was:

Advise that this decision is tax efficient but suggest that the bonus scheme for executives should be
based on profits before tax and after a notional adjustment.
This is probably the most appropriate decision on a business ethics basis, as there is a professional
responsibility on you as a tax adviser to recognise that overall tax savings are available for making
this decision and, with a view to the shareholders, your advice will increase the profits available to
them. The advice that executive bonuses should be based on adjusted pre-tax profits recognises
that you understand the full implications of the tax planning decisions on other areas of the
business. You are demonstrating ethical sensitivity in recognising that the amendment of a transfer
price in one country is affecting the bonuses paid to executives in another country when the
decision is not within their control.

3. Auditing:
As audit manager to a client supplying lifts, you notice that payments are made to a person who
you know to be the Procurements Officer of a local authority which regularly purchase lifts and lift
equipment from your client.

Your response was:

Ask your clients what these payments are for and ask to see all the originating documentation
before taking matters further.
This is the most appropriate approach, as you are professionally obliged to recognise that this may
be a situation where a conflict of interest, or something worse, exists. You are right to investigate
the payment and seek evidence of its nature through inspecting originating documentation and by
questioning your client about this before you report or discuss this with anyone else.

4. Performance Management:
You are a newly promoted department manager and the head of your division asks you to submit
budget requirements for your department. When you submit your travel expense budget to your
head, he asks you to increase it by 25% saying that you need to build in some slack to cover
unforeseen additional expenses and to ensure that your travel budget is not exceeded.
Your response was:

Ask your manager why he suggests such an increase, when you had already calculated your
estimated travel needs and then agree, or not, on the basis of his answer.
This is probably the most appropriate response, since you need to give your manager the
opportunity to explain his motivation for the request to increase the travel budget. For example, he
may have identified additional objectives or contingencies for the department which may have
associated travel costs. If you are satisfied that there are genuine business reasons for such an
increase you may then feel justified in making the budget change. However, if you are not
convinced by your manager’s answer you might need to question his decision further and argue the
case for not making the adjustment on wider business grounds. If you are unable to convince your
manager you may need to think about taking the matter further.

5. Financial Management:
You are a treasury manager in a large multinational business. You are setting a pricing strategy for
your sales manager. She is negotiating to win a major contract for the export of equipment
produced in the UK to the government of a country which has a volatile currency against sterling.
The payment will be made in the local currency in a year's time. Your estimates give a 50%
probability of a 0-20% devaluation of the local currency against sterling and a 50% probability of a
strengthening of 0-20% of the currency against sterling over the next 12 months. There are also
several local and international suppliers bidding for the contract against your company.

Your response was:

Price the contract competitively in local currency and plan to immediately buy sterling futures up to
the value of the contract price and sell them for the local currency at the spot rate in a year's time.
This is the most professionally competent and efficacious business decision, given the risk appetite
of the shareholders of your company, since it gives you a good chance of winning the contract
against other tenders as you are pricing the contract in local currency. The customer is not exposed
to exchange risk themselves and you are hedging the exchange risk yourself, thus reducing
exposure against the possibility of a severe devaluation of the local currency against sterling. This
decision would be in the best interests of the customer and all the stakeholders. Successful delivery
of the contract would be profitable and may allow further opportunities with that customer.

   APPLYING WHAT YOU HAVE LEARNED

Total marks feedback
If your score indicates that you might have a problem with ethical decision making, why not review
the module About ACCA’s fundamental principles, then take the test again? It is more useful to
make mistakes and learn from them while taking an online course, rather than making mistakes in
real life.

5 - 10
Your score indicates possible problems with your professional competence in some of the areas, but
is more likely to indicate that you may be too diffident, or lack some confidence in handling
awkward situations or in dealing with difficult choices, particularly where these are concerned with
clients or your immediate manager. You seem susceptible to certain threats to fundamental
principles such as self-interest or intimidation. These uncertainties probably mean that you are
unsure about where and how to get proper information to help you make effective decisions, or in
deciding who to discuss things with and when. You may also be unsure about how you should go
about taking unresolved matters further, without damaging your own personal or professional
interests, or those of your colleagues, or even those of wider stakeholder groups both within your
own organisation and in connected organisations. You may need to develop a greater ethical
sensitivity and maturity so that your ethical judgement can be improved for the future.

11 -15
Your score indicates that in most situations you seem to demonstrate ethical sensitivity, if not
always the most appropriate ethical judgement in the most difficult of situations. Your score also
suggests that you try to think beyond your immediate personal and professional needs and those of
your close colleagues or clients and do try to follow through the impact of your decisions on wider
stakeholder groups, both within your own organisation, and on other connected organisations.

16 -20
Your score indicates that you demonstrate professional competence within all, or almost all the
areas, and that you are usually sure about the best course of action even when this is not as clear
cut as it might be. In almost all situations you seem to demonstrate acute ethical sensitivity, but
can also follow this through into appropriate ethical judgement and you seem to be aware and can
manage threats to fundamental principles. Your high score also indicates that you always try to
think beyond your immediate personal and professional needs and those of your close colleagues or
clients and do anticipate and follow through the impact of your decisions on wider stakeholder
groups both within your own organisation, and also in other connected organisations.

Tell us what you have learned
The objective of this unit is to demonstrate what you have learned while working through the
Professional Ethics module.

Please tell us about that experience and how that might make you a better accountant. We expect
between 100 and 250 words, and we will be monitoring your response.

Note: After you click Save, your statement will be saved and you will not be able to change what
you have written. At the same time, our database will record the fact that you have completed this
module. If you want to work on your response over several days, you may want to compose your
response offline.

                                           Words Count: 4

				
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