Topic: Professional ethics in accounting and business

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  • 5 Marks

BMIS – Nov 2021 – L1 – Q2c – Professional ethics in accounting and business

Outline actions by accountants that demonstrate acting in the public interest.

Although a professional code of ethics does not clearly define ‘public interest’, an Accountant would be deemed to be acting in the public interest when he takes certain actions to perform his duties.

Required:
Outline FIVE (5) of such actions. (5 marks)

Actions Reflecting Public Interest in Accounting

  1. Detecting and reporting any misdemeanour:
    Accountants act in the public interest when they detect and report any illegal or unethical activities, ensuring transparency and accountability within organizations.
  2. Ensuring the public is not misled:
    They ensure that the public is not misled by any statement or action of a person or entity, thereby maintaining the integrity of financial information that the public relies on.
  3. Protecting public health and safety:
    Accountants contribute to the protection of public health and safety by ensuring that the financial resources allocated for public projects are properly managed and not misappropriated.
  4. Exposing misuse of public funds:
    By exposing any misuse of public funds, accountants help safeguard public assets, ensuring that resources are used efficiently and for the intended purposes.
  5. Providing accurate financial information:
    Ensuring that financial information is accurate and truthful, which is essential for informed decision-making by stakeholders and the general public.

(5 points @ 1 mark each = 5 marks)

  • 5 Marks

BMIS – Nov 2021 – L1 – Q2b – Professional ethics in accounting and business

Differentiate between a business code of ethics and a professional code of ethics for accountants.

You have been invited as the Chief Operating Officer of Your Trusted Associates, a reputable Accounting and Management Consulting firm, to deliver the keynote address at a graduation ceremony for newly qualified Accountants.

Required:
In your address, differentiate between a “business code of ethics” and a “professional code of ethics” for Professional Accountants. (5 marks)

Business Code of Ethics vs. Professional Code of Ethics

  • Business Code of Ethics:
    A business code of ethics refers to a statement that defines the ethical standards and expectations of a business organization. It guides employees on how to act in a way that upholds the organization’s ethical values and promotes the company’s mission. This code is usually specific to the organization and its operations.
  • Professional Code of Ethics for Accountants:
    A professional code of ethics for accountants is a set of guidelines established by professional accounting bodies, such as ICAG, detailing how accountants should behave in the performance of their duties. It covers areas such as integrity, objectivity, professional competence, confidentiality, and professional behavior. This code is uniform across the profession and applies to all accountants, regardless of their specific employer or role.

(2 points well explained @ 2.5 marks each = 5 marks)

  • 10 Marks

BMIS – Jul 2023 – L1 – Q1a – Professional ethics in accounting and business

Outlines ethical obligations of a company towards employees, customers, shareholders, suppliers, and the community.

The basis for assessing excellent company performance is gradually moving away from profitability to how ethical the company operates and treats its stakeholders.

Required:
Outline TWO (2) ethical obligations of a company towards the following stakeholders.
i) Employees (2 marks)
ii) Customers (2 marks)
iii) Shareholders (2 marks)
iv) Suppliers (2 marks)
v) Community (2 marks)

i) Employees:

  • Avoid unnecessary redundancies.
  • Provide safe and healthy working conditions.

ii) Customers:

  • Provide quality goods and services to buyers.
  • Avoid deceptive pricing practices.

iii) Shareholders:

  • Avoid insider trading.
  • Avoid declaring losses when the company is actually making profits.

iv) Suppliers:

  • Pay suppliers on time.
  • Avoid discriminatory practices in the selection of suppliers.

v) Community:

  • Avoid all forms of pollution in the community.
  • Provide a quota of the company’s workforce to the people in the community.
  • 10 Marks

BMIS – Aug 2022 – L1 – Q1a – Professional ethics in accounting and business

Explains five duties expected of those charged with governance in an organization.

In 2017, some financial institutions in Ghana were placed under receivership. This was mainly due to poor corporate governance practices. Some of these practices were in clear violation of the duties and responsibilities of those charged with governance.

Required:

Explain FIVE (5) duties those charged with governance were expected to perform.

Duties of Those Charged with Governance:

  1. Fiduciary Duty:
    This duty required the directors to exhibit trustworthiness in acting in the best interest of those whom they represented. This duty required the directors to perform their mandated duties with high levels of integrity and competence.
  2. Duty of Loyalty:
    The duty of loyalty of a corporate director makes him/her commit allegiance to the companies they served as directors and acknowledge to work in the best interests of those companies.
  3. Duty of Fair Dealing:
    This duty required that all transactions conducted on behalf of the companies were handled in a transparent manner. The directors were expected to open up all their dealings to considerable scrutiny.
  4. Duty of Care:
    The duty of care required the directors to act with the highest level of cautiousness in carrying out their responsibilities. They were to apply their common sense when working on behalf of those whom they represented to avoid being accused of committing blunders.
  5. Duty of Supervision:
    This deals with the effectiveness with which the directors were to exercise their mandated duties. Further, the duty of supervision required the directors to have absolute control and knowledge about the activities of management to prevent all fraudulent practices on the part of management.

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