Introduction

Accountants deal with the intimate financial details of individuals and organisations. Some execute million-dollar transactions, and others assist with safeguarding superannuation (retirement) funds of everyday people such as nurses, retail workers and teachers. Law and ethics are the fundamental principles that accounting professionals choose to abide by to enhance their profession, maintain public trust and demonstrate honesty and fairness. People who join organisations and secure the credentials to present themselves to the public as Chartered Accountants (CA) or Certified Public Accountants (CPA) or Chartered Certified Accountants (CCA) strive to protect the reputation of the profession. Unfortunately, not everyone who works in the accounting field is trustworthy. Daily violations of public and private trust occur, and resolving ethical dilemmas does not always end favorably. In this chapter, we examine APES 110 Code of Ethics for Professional Accountants and the five ethical principles that deserve the attention of anyone considering working in the accounting profession, and discuss its implication for current (and future) accountants.

Chapter outline

After reading this chapter, you should be able to:

1. Understand legal considerations in business and accounting
2.  Understand the need for accountants to be ethical and independent
3.  Define and describe the principles of ethical conduct
4.  Define and describe the threats to ethical conduct
5.  Identify various safeguards to the practice of ethics in organisations