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Concepcion Yamat Lupisan Fundamentals of Accounting VOL1 2007 Pg 8-14

Accounting Profession The accounting profession refers to a body of professionals on whom the government through the Professional Regulatory Board of Accountancy has conferred the title of Certified Public Accountant (CPA). The title is granted to the individual who passes the CPA Licensure Board Examination. There are four major areas of professional accountancy practice namely: 1. Practice in public accountancy 2. Practice in commerce and industry 3. Practice in government 4. Practice in education/academe Practice in Public Accountancy Accountants in public practice provide their services to the public. They may provide these services as sole practitioners or as members of a partnership. Public practice involves the following main areas: audit services, taxation services, management consulting services as well as business recovery and insolvency management. Practice in Commerce and Industry This shall constitute in a person involved in decision making requiring professional knowledge in the science of accounting, or when such employment or position requires that the holder thereof must be a certified public accountant. Practice in Education/Academe This shall constitute in a person in an educational institution which involve teaching of accounting, auditing, management advisory service, finance, business law, taxation, and other technically related subjects.

Practice in Government This shall constitute in a person who holds, or is appointed to, a position in the accounting professional group in government or in a government-owned and/or controlled corporation, including those performing proprietary functions, where decision making requires professional knowledge in the science of accounting, or where a civil service eligibility as a certified public accountant is a prerequisite.

Basic Professional Values and Ethics Users of accounting information both external and internal recognize that the usefulness, reliability of accounting information is affected by the personal attributes of competence, professional judgement, and ethical behavior of accountants. In general, the accountant should be able to recognize and understand ethical issues to identify and evaluate the possible consequence of each of the alternative solutions and to select the best alternative in which will ensure relevant, reliable, comparable and consistent financial information to serve the best of the users interests as a whole. Ethics is a term refers to a code or moral system that provides criteria for evaluating right and wrong. One of the elements that many believe distinguishes a profession from other occupations is the acceptance by its members of a responsibility for the interest of those it serves. Because of the important role of accounting in society, accountants must maintain high ethical standards. Facing pressures and influence of numerous groups with conflicting interests, the accountant should always be alert about ethical behavior. The Code of Ethics promulgated by the Board of Accountancy provides guidelines for practicing accountants. However, the code does not present a structured approach to resolving ethical dilemmas and conflicts. CPAs as well as other accountants are expected to make unswerving commitment to honorable behavior, even at the sacrifice personal advantage. Ethical considerations pervade all areas of accounting and business. The ethical challenge for accountants was to provide investors, creditors, and other interested parties with enough information to enable them to make informal judgment about the business enterprise. Ethics is a code of conduct that applies to everyday life. It addresses the question of whether actions are right or wrong. Ethical actions are the product of individual decisions. You are faced with many ethical situations every day. Some may be potentially illegal the temptation to take office supplies from your employer to use when you do homework for example. Others are not illegal but equally unethical for

example, deciding not to tell a fellow student who missed class that a test has been announced for the next class meeting. When an organization is said to act ethically or unethically, it means that individuals within the organization have made a decision to act ethically or unethically. When a company uses false advertising, cheats customers, pollutes the environment, treats employees poorly, or misleads investors by presenting false financial statement, members of management and other employees have made a conscious decision to act unethically. In the same way, ethical behavior within a company is a direct result of the actions and decisions of the companys employees.

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Reference: Salosagcol, J., Tiu, M. and Hermosilla, R. (2009), The Code of Professional Ethics and the Philippine Accountancy Act, Auditing Theory, p. 407

A distinguishing mark of t he accounting profession is its responsibility to the public. In todays modern environment, many segment s of society are increasingly dependent for decision making on information for which they have no control. They turn to professional accountants for assistance in assessing the reliability of some of this information. Every failure by an accountant to comply with professional standards makes it difficult for the profession to maintain the reputation for integrity, objectivity, and competence that it has acquired over its many years of service to the public. In order to maintain public trust and confidence in the accounting profession, professional accountant must adhere to standards of ethical conduct: standards of conduct that embody and demonstrate integrity, objectivity, and concern for the public (rather than self-) interest. The Philippine Institute of Certified Public Accountants (PICPA) has adopted the Code of Professional Ethics developed by IFAC.