6.1 Professional Ethics

• What do ethics in accounting refer to?

  Moral principles
• Ethical behavior in accounting ensures accountants act with honesty, integrity, objectivity, confidentiality, and professional competence
• What does the principle of honesty in accounting require?

  Truthful financial presentation
• Integrity in accounting means maintaining moral principles and acting with strong ethical values.
• What does the principle of objectivity in accounting ensure?

  Bias-free financial reporting
• Match the ethics code with its institution:

  ACCA ↔️ Association of Chartered Certified Accountants

  ICAEW ↔️ Institute of Chartered Accountants in England and Wales

  AICPA ↔️ American Institute of Certified Public Accountants
• Ethical conduct enhances public trust in financial information
• Order the key benefits of ethical behavior in accounting:

  1️⃣ Enhancing public trust

  2️⃣ Ensuring accuracy and reliability of financial statements

  3️⃣ Maintaining the integrity of the accounting profession

  4️⃣ Promoting compliance with laws and regulations

  5️⃣ Protecting the organizational reputation
• Why is maintaining integrity important in accounting?

  Builds public trust
• Conflicts of interest in accounting arise when duties to different parties must be balanced.
• What is a key strategy for resolving ethical dilemmas in accounting?

  Consult ethical codes
• Resolving ethical dilemmas requires integrity and professional judgment
• What is a potential impact of ethical failures on accounting organizations?

  Decline in market value
• Ethical behavior in accounting ensures accountants act with honesty, integrity, objectivity, confidentiality, and professional competence.
• What are ethics in accounting defined as?

  Moral principles
• Honesty in accounting means presenting financial information truthfully.
• Objectivity in accounting requires reporting financial data without bias
• What does confidentiality in accounting involve?

  Protecting sensitive information
• Professional competence in accounting ensures up-to-date skills and knowledge.
• Ethical principles in accounting maintain public trust
• Match the ethics code with its unique feature:

  ACCA ↔️ Emphasizes global ethical standards

  ICAEW ↔️ Includes guidance on ethical risk management

  AICPA ↔️ Stresses independent thinking
• Why is ethical conduct crucial in accounting?

  Enhances public trust
• Strategies for resolving ethical dilemmas in accounting

  1️⃣ Consult ethical codes

  2️⃣ Seek internal guidance

  3️⃣ Report concerns
• When do ethical dilemmas in accounting occur?

  Ethical principles conflict
• One common ethical dilemma in accounting is conflicts of interest
• Consulting ethical codes is a strategy for resolving ethical dilemmas
• What is essential for maintaining trust and credibility in accounting?

  Integrity and judgment
• Governance structures such as the board of directors ensure adherence to ethical standards
• Audit committees oversee financial reporting and internal controls
• How do governance structures promote ethical behavior in accounting?

  Enforcing ethical policies
• Match the governance structure with its role in promoting ethical behavior:

  Board of Directors ↔️ Oversees ethical culture

  Audit Committee ↔️ Ensures financial compliance
• Steps in resolving ethical dilemmas in accounting

  1️⃣ Identify the dilemma

  2️⃣ Consult ethical codes

  3️⃣ Seek guidance from peers

  4️⃣ Evaluate alternatives

  5️⃣ Make a decision
• What does maintaining strong governance structures ensure in accounting?

  Compliance and transparency