E4-Professional practice and codes of ethics

Ethical Codes

Ethical Codes
Purposes of codes of ethics

To convey the ethical values of the company to employees, customers,

communities and shareholders.
To control unethical practice by limiting and prescribing behaviour in given
situations
To stimulate improved ethical behaviour by insisting on full compliance with
the code.

Contents of a corporate code of ethics

Remember this by the useful acronym ETHICS..

E mployees policies eg equal opportunities policies, training etC

T ransparent & Truthful Treatment of shareholders
H ow customers are treated (complaint procedures etc)
I nclude everyone affected (e.g. Community and wider society)
C ompany Values
S ourcing of products/ materials done ethically

Professional Codes of Ethics

Content
1. Introduction
(Background and disciplinary measures)
2. Fundamental Principles
(Summary)
3. Conceptual Framework
(How principles are applied)
4. Detailed Application
(Specific circumstances)

Principles

1.
2.
3.
4.
5.

Integrity
Objectivity
Professional Competence
Confidentiality
Professional BehaviourLimitations of Codes

Limitations

They can convey the (false) impression that professional ethics can be
reduced to a set of rules contained in a code.
Personal integrity is needed also emphasised.
Ethical codes do not and cannot capture all ethical dilemmas that an
accountant will encounter.
Regional variations mean that such codes cannot capture important
differences in emphasis in some parts of the world.
The moral right cannot be prescribed in every situation.
Professional codes of ethics are not technically enforceable in any legal
manner