Tough Guidelines for Accountants Proposed by the Ethics Board

Thursday, November 27, 2014 Print Email

Accountants have been imposed upon on tougher rules by the International Ethics Board in a bid to discourage them in giving business financial information that is misleading.Operating under the sponsorship of the International Federation of Accountants, IESBA on Tuesday issued an exposure draft for public scrutiny with regard to the new rules. These are the changes proposed on the Code of Addressing Information Presentation. Also included is the Pressure in breaching the basic Principles.

The proposals act in response to the requirements for more practical and full bodied guidance in assisting professional accountants in business dealings. It was pointed out that there were two issues where accountants often ask for assistance during their practice; pressure in breaching basic moral principles and also their responsibility to give financial reports that are true representations of transaction economics.

In the supply chain of financial reporting, a very important role is played by the professional accountants in business; PAIBS. In their bid to act in an ethical manner, they may be faced with pressure. This proposed guideline will assist them in understanding their alternatives and in effect support them greatly while they undertake to act in the interest of the public. When gathering financial information, the proposal also makes it clear that when gathering the financial information, one should apply sound judgment for example when choosing on an applicable accounting method. It is totally unacceptable to mislead an organization.

There is a more complete and precise guidance with regard to the responsibilities of the accountant during the information presentation. There is also a more powerful guidance on how an accountant is expected to turn away from information that is misleading. Pressure which may cause principles to be breached is also explained in detail in the Code of Ethics. There are also several situations illustrated where pressure may arise. Also included are the new guidelines that may assist business accountants to recognize and make response to pressure which could lead to breach of the basic principles.

All those who have their interest at heart in international ethics standards for the accountancy profession have been asked by IESBA to give their views on the exposure draft. The board is also advocating for the professional accountancy organization in the region and nation at large to have the exposure draft shared with members and employees

Source: ReadyRatios

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