HAZEL TRISHA RAON These objectives identify 4 basic needs to be

met
BSA 3
1. Credibility - The need for credibility in
information and information systems is crucial.

TOPIC 2 2. Professionalism - The demand for

professionals in the accountancy field who can
Definition of a Profession be easily identified by clients, employers, and
other interested parties is significant.
A profession is a specialized vocation that
provides objective counsel and service to others 3. Quality of Services - The need for assurance
for direct compensation, without any that all services provided by a professional
expectation of business gain. attendant are performed to the highest
standards of performance is essential.

4. Confidence - Professional accountants should

Attributes of a profession
provide services with a framework of
1. Systematic body of theory - public accounting professional ethics to ensure the confidence of
has accounting and auditing theory their users.
2. Professional authority - the public relies on
CPAs expertise in accounting and auditing
What are ethics?
3. Community sanction - controlled admission
Ethics are moral principles, rules of conduct, or
into practice (difficult Board Exam)
values that guide individuals in making decisions
4. Regulative code - CPAs have Code of Ethics based on various alternatives, and all
and Rules of Professional conduct recognized professions have developed codes of
professional ethics.
5. Culture - Accountants have formal norms (the
Code of Ethics), informal rules guiding inter Why there is a need for a Code of Ethics?
practitioner relationship and CPA Board Exam  The profession aims to achieve common
myth interests through the observance of
fundamental principles.

 The accountancy profession is renowned for

Objective of the accountancy profession
its public interest responsibility, serving clients,
1. To work to the highest standards of credit grantors, governments, employers,
professionalism employees, investors, and the business
community, ensuring the orderly functioning of
2. To attain highest levels of performance and
commerce.
3. To meet the public interest requirement

STRUCTURE OF THE CODE

 Part 1 - Complying with the Code, the

fundamental principles and conceptual
framework are universally applicable to all
professional accountants.
FUNDAMENTAL PRINCIPLES
 Part 2 - Professional Accountants in Business,
A professional accountant shall comply with
this document provides additional information
each of the following fundamental principles.
for professional accountants in business,
including those employed, engaged, or Integrity
contracted in executive or non-executive
capacities., for example:  Integrity in professional and business
relationships involves being straightforward,
o Commerce, industry or service. honest, fair, and truthful, ensuring fair dealing
and fostering a positive work environment.
o the public sector.
 Accountants must not be associated with
o Education.
reports, returns, or communications that
o the not-for-profit sector. contain materially false or misleading
statements, reckless statements, or omit or
o Regulatory or professional bodies.
obscure required information.
 Part 3 - Professional Accountants in Public
Objectivity
Practice, this document provides additional
information that applies to professional  It is crucial to avoid compromising
accountants in public practice when providing professional or business judgments due to bias,
professional services. conflict of interest, or undue influence of
others.
 Part 4 - International Independence
Standards, this document provides additional  The accountant is prohibited from engaging in
information for professional accountants in a professional activity if a circumstance or
public practice who provide assurance services. relationship significantly influences their
professional judgment.

PART 1: COMPLYING WITH THE CODE,

FUNDAMENTAL PRINCIPLES AND CONCEPTUAL CONCEPTUAL FRAMEWORK APPROACH
FRAMEWORK
 The professional accountant must
COMPLYING WITH THE CODE comprehend the facts and circumstances,
including any professional activities, interests,
 A professional accountant must adhere to the
and relationships that may affect compliance
Code, even if certain laws or regulations prevent
with fundamental principles.
them from doing so, as these laws and
 The existence of professional conditions,
regulations must prevail.
policies, and procedures can enhance ethical
 A professional accountant must assess the accountant behavior and identify threats to
significance and impact of a breach on their compliance with fundamental principles.
ability to adhere to fundamental principles.
Threats to Compliance with Fundamental
Principles

1. Self-interest threat - The possibility of

financial or other interests affecting the
decisions or actions of a professional
accountant.

2. Self-review threat - The threat of a

professional accountant failing to accurately
evaluate previous judgments or activities within
their firm or employing organization is a
significant concern.

3. Advocacy threat - The accountant's

objectivity may be compromised if they
promote a client's or an organization's position,
potentially compromising their work.

4. Familiarity threat - The threat arises from a

professional accountant's close relationship
with a client or an organization, potentially
leading to oversimplification or acceptance of
their work.

5. Intimidation threat - The threat of

professional accountants being deterred from
acting objectively due to actual or perceived
pressures, including attempts to exert undue
influence.