Docstoc

The Role of Professional Accountant

Document Sample
The Role of Professional Accountant Powered By Docstoc
					The Role
of a Professional Accountant
   Why is understanding it critical?
   Scandals     Rededication
   Public expectations of:
       All professionals
       Professional accountants
   Fiduciary relationships
   Implications for services offered
   Judgements and values
   Sources of ethical guidelines
Understanding the Role
Answers Questions
   Who really is our client: the company, the
    management, current shareholders, future
    shareholders, the public?
   Do I owe primary loyalty to my employer, client,
    boss, profession, myself, or the public?
   Am I a professional accountant bound by
    professional standards, or just an employee?
   Is professional accounting a profession or a
    business - can it be both?
   When should I not offer a service?
   Can I serve two clients with competing interests?
   Is there any occasion when breaking the
    profession's guideline against revealing confidences
    is warranted?
Lang Michener Affair

   Are expectations for professional
    standards above non-professionals?
   Lawyers actions not up to
    expectations, or obligation to
    clients, prof., law society, public?
   Is self-regulation effective?
   Is an honest mistake “of no
    consequence?”
Dilemma of an Accountant

   Pressure for a “clean opinion”
   Problem is not material
   No one read or cared about those
    statements anyway
   Removal of working papers
   Action???
Public Expectations of a Profession
   Essential Features:                      (Bayles)
       Extensive training
       Provision of important services to society
       Training and skills largely intellectual in character
   Typical Features:
       Generally licensed or certified
       Represented by organizations, associations,
        institutes
       Autonomy
   Foundation of Ethical Values:            (Behrman)
       Significantly delineated by and founded on ethical
        considerations rather than techniques or tools
Features, Duties, Rights & Values Of
the Accounting Profession… Table 4.2

   Features
   Duties essential to a fiduciary
    relationship
   Rights permitted by most
    jurisdictions
   Values necessary to discharge duties
    and maintain rights
Features and Duties
Features:
   Provision of important fiduciary services to society
   Extensive knowledge and skill are required
   Training and skills required are largely intellectual
   Overseen by self-regulating membership organisations
   Accountable to governmental authority

Duties essential to a fiduciary relationship:
   Continuing attention to the needs of clients and other
    stakeholders
   Development & maintenance of required knowledge &
    skills
   Maintenance of the trust inherent in a fiduciary
    relationship by behaviour exhibiting responsible values
   Maintenance of an acceptable personal reputation
   Maintenance of a credible reputation as a profession
Rights Permitted, Values Necessary
Rights permitted in most jurisdictions:
   Ability to hold oneself out as a designated professional to
    render important fiduciary services
   Ability to set entrance standards and examine candidates
   Self-regulation and discipline based on codes of conduct**
   Participation in the development of accounting & audit
    practice
   Access to some or all fields of accounting & audit endeavour

Values necessary to discharge duties & maintain rights:
   Honesty & Integrity (i.e. truth & the whole truth)
   Objectivity - based on independent judgement
   Desire to exercise due care
   Competence
   Confidentiality
   Commitment to place the needs of the public, the client, the
    profession, and the employer or firm before the
    professional's own self-interest
Important Implications

   Dominance of ethical values vs.
    technical competence
   Priority of duty
       Public
       Profession
       Client/employer
       Professional
   Confidentiality:      strict vs assisted
Important Implications

   For Services offered

   Critical value-added

   Standards for behaviour
Importance of Values To Value-added &
Development of Judgement

Kohlberg’s Six Stages of Moral Reasoning
Preconventional       Self-interest Motivation
   1.          Fear of punishment & authorities
   2.          Self-gratification
Conventional          Conformity Motivation
   3.          Approval from others
   4.          Adherence to moral codes, law & order
Principled            Interests of others
   5.          Concern for others, broad social welfare
   6.          Concern for moral or ethical principles
Sources of Ethical Guidance

   Codes of conduct

   Laws & jurisprudence

   When codes & laws don’t count
Legal Liability Developments
   Personal liability: history, rationale,
    partnership
   Joint & several liability……deep pockets sued
   Self-insurance plus $50-150 mil external ins.
   Burden getting too high……how to limit?
   Lawsuit trend - Victoria Mtge - GAAP but misleading
   Limited Liability Partnerships (LLP,LLC, PSLLC)
       1994 New York State Law protects innocent partners from
        personal liability for the negligence and malpractice of
        other partners, not from commercial losses, or from their
        own misdeeds, or from losing their invested capital.

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:2
posted:10/15/2012
language:English
pages:13