INSTITUTE OF CHARTERED ACCOUNTANTS, GHANA INDUCTION COURSE ON THE CODE OF ETHICS FOR Professional Accountants

Alisa Hotel, North Ridge 17 MARCH 2011 Presenter: Kwadwo Mpeani Brantuo Partner, Ernst & Young

KEY PRINCIPLES

The higher the Monkey climbs, the more its buttocks are exposed.
Proverb from Malawi

KEY PRINCIPLES

If I had eight hours to chop down a tree, Id spend six sharpening my axe.
Abraham Lincoln

KEY PRINCIPLES

If your foot slips, you can recover your balance. If your tongue slips, you cannot recover your words. The spoken word is like a stone, once it is thrown, it cannot be retrieved.
[Ghanaian proverbs]

AGENDA
 Introduction  General

Application of IFAC Code of Ethics Accountants in Public Practice Accountants in Business and the

 Professional  Professional

Public Sector

Introduction - International Trends

Legislation/Standards
Sarbanes-Oxley requires more focus on ethics and not merely control (more work with internal control and underlying ethical behaviour) New and similar legislation in Germany, France, Denmark European Union has given notice of new rules which bring its requirements closer to those of Sarbanes-Oxley Basel II committee has formulated a number of recommendations about good management within Ethics and Compliance U.S. Congress is reviewing regulatory framework following recent global financial crisis and corporate collapses.

Changes in Insurance
Increased insurance premiums to Executive and Supervisory Boards as well as new requirements for Supervisory Boards

Standards for Business Conduct and Ethical behaviour. A leader with the responsibility for complying with relevant legislation and standards of business conduct should be appointed and report to the Board.

Introduction (contd) - International Trends

High Profile Events

Ousting of Boeing CEO Bernhard Ebbers of WorldCom found guilty on 9 counts including conspiracy faces up to 85 years in prison Tyco/Enron cases

What other marketplace forces are out there putting pressure on firms to ensure integrity, quality, transparency in their processes?
Regulatory Legal Client Social

Introduction (contd) - U.S. Federal Sentencing Guidelines

November 2004 Amendments to Chapter 8: Sentencing Guidelines for Organizations 2 Key Factors mitigate the ultimate punishment of an organization
1. 2.

Existence of an effective compliance and ethics program Self reporting, cooperation, acceptance of responsibility

The focus is on promoting an organizational culture that encourages ethical conduct and a commitment to compliance with the law

GENERAL APPLICATION OF THE IFAC CODE OF ETHICS

The IFAC Ethics Code

The Code is in three parts as follows:

Part A establishes the fundamental principles of professional ethics for Professional Accountants and provides a conceptual framework for applying those principles. Parts B and C illustrate how the conceptual framework is to be applied in specific situations. Part B applies to professional accountants in public practice. Part C applies to Professional Accountants in business.

Agenda
Mission

of IFAC The importance of ethics Fundamental principles Conceptual framework Threats and safeguards

Mission of the International Federation of Accountants

To serve the public interest, IFAC will continue to strengthen the worldwide accountancy profession and contribute to the development of strong international economies by establishing and promoting adherence to high-quality professional standards, furthering the international convergence of such standards and speaking out on public interest issues where the professions expertise is most relevant.

Mission of the International Federation of Accountants (Contd /2)

The Code of Ethics of the International Federation of Accountants establishes ethical requirements for Professional Accountants.

A member body of IFAC or firm may not apply less stringent standards than those stated in this Code. However, if a member body or firm is prohibited from complying with certain parts of this Code by law or regulation, they should comply with all other parts of this Code.

Mission of the International Federation of Accountants (Contd /2)

Know and accept your own strengths and weaknesses. In other words; look at yourself honestly . Understand your passions, your skills, your temperament, and your limitations. If youre a square peg, no matter how hard you or others work try, youre just NOT going to fit very well into a round hole. [Katie Couric]

What do we mean by ETHICS

It is about the way we behave towards each other, our clients, our community, our country and our regulators/legislators. It is about honesty and integrity and working within the letter and the spirit of the law. It is about making professional choices. the right decisions and

The Importance of Ethics

Provide an ethical compass as a basis for decision and action Stand-out in our profession as a firm/practitioner with high ethical standards Strengthen image, reputation and relationships with stakeholders Build professional trust

Minimize overall firm risk/ potential liability and avoid legal liability/prosecution

The Importance of Ethics (contd)

Benefits of Managing Ethics in the Workplace

Attention to business ethics has substantially improved society. Ethics programs help maintain a moral course in turbulent times. Ethics programs cultivate strong teamwork and productivity. Ethics programs support employee growth and meaning Ethics programs are an insurance policy -- they help ensure that policies are legal. Ethics programs help avoid criminal acts of omission and can lower fines. Ethics programs help manage values associated with quality management, strategic planning and diversity management. Ethics programs promote a strong public image. managing ethical values in the workplace legitimizes managerial actions, strengthens the coherence and balance of the organizations culture, improves trust in relationships between individuals and groups, supports greater consistency in standards and qualities of products, and cultivates greater sensitivity to the impact of the enterprises values and

IFAC Fundamental Principles

A distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest. Therefore, a Professional Accountants responsibility is not exclusively to satisfy the needs of an individual client or employer. In acting in the public interest a Professional Accountant should observe and comply with defined ethical requirements.

IFAC Fundamental Principles

We hereby re-emphasis that a distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest. The Professional Accountant's responsibility is therefore NOT exclusively to satisfy the needs of an individual client or employer but to act in the public interest.

IFAC Fundamental Principles

To ensure that this is achieved, the Professional Accountant should observe and abide by the ethical requirements of the International Federation of Accountants (IFAC) Code of ethics. IFACs is a global organization with a mission that concerns the integrity and expertise of the accounting profession worldwide and in Ghana the mission is represented by the Institute of Chartered Accountants (Ghana).

IFAC Fundamental Principles

What is Professionalism?

Professionalism is defined as the active demonstration of the traits of a professional. These traits include: knowledge and skills of the profession, commitment to self-improvement of skills and knowledge, service orientation, pride in the profession, covenantal relationship with client, creativity and innovation, conscience and trustworthiness, accountability for his or her work, ethically sound decision making and leadership. Professional development would then be the process in which a person develops these traits.

IFAC Fundamental Principles

In essence, Professionalism is the WILLINGNESS TO DO THE RIGHT THING.

The IFAC Code of Ethics was adopted by Ghana on 30 June 2006.

IFAC Fundamental principles (contd /2)

A Professional Accountant is required to comply with the following fundamental principles:

(a) INTEGRITY, (b) OBJECTIVITY, (c) PROFESSIONAL COMPETENCE AND DUE CARE, (d) CONFIDENTIALITY, and (e) PROFESSIONAL BEHAVIOR.

Fundamental principles (contd /3)

(a) Integrity A Professional Accountant should be straightforward and honest in all professional and business relationships. (b) Objectivity A Professional Accountant should not allow bias, conflict of interest or undue influence of others to override professional or business judgments. (c) Professional Competence and Due Care A Professional Accountant has a continuing duty to maintain professional knowledge and skill and act diligently and in accordance with applicable technical and professional standards.

Fundamental principles (contd /3)

(d) Confidentiality A Professional Accountant should respect the confidentiality of information. Confidential information should not be used for the personal advantage of the Professional Accountant or third parties.

(e) Professional Behavior A Professional Accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession and our dear Institute of Chartered Accountants, Ghana. (ICAG).

Conceptual Framework
The conceptual framework requires a Professional Accountant to identify, evaluate and address threats to compliance with the fundamental principles, rather than merely comply with a set of specific rules. The circumstances in which Professional Accountants operate may give rise to specific threats to compliance with the fundamental principles.

Threats and Safeguards

Threats fall into the following general categories:

(a) Self-interest threats; (b) Self-review threats; (c) Advocacy threats; (d) Familiarity threats; and (e) Intimidation threats.

Threats and Safeguards (contd /2)

Safeguards that may eliminate or reduce such threats to an acceptable level fall into two broad categories:

Safeguards created by the profession, legislation or regulation; and Safeguards in the work environment.

Threats and Safeguards (contd /3)

Safeguards created by the profession, legislation or regulation include, but are not restricted to:

Educational, training and experience requirements for entry into the profession. Continuing professional development requirements. Corporate governance regulations. Professional standards. Professional or regulatory monitoring and disciplinary procedures. External review by a legally empowered third party of the reports, returns, communications or information produced by a Professional Accountant.

Threats and Safeguards (contd /4)

Safeguards, which may be created by an employing organization or in the work environment, include, but are not restricted to:

Effective, well publicized complaints systems operated by the employing organization, the profession or a regulator, which enable colleagues, employers and members of the public to draw attention to unprofessional or unethical behavior; and An explicitly stated duty to report breaches of ethical requirements.

Threats and Safeguards (contd /4)

Who is a BIG MAN?

Really Big People are, above everything else, courteous, considerate and generous not just to some people in some circumstances but to everyone all the time.
Thomas J Watson

PROFESSIONAL ACCOUNTANTS IN PUBLIC PRACTICE

It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that you will do things differently.

Warren Buffett

Goodwill like a good name is got by many actions, and lost by one.

Lord Jeffrey
17731850, Scottish critic and judge

Old World

New World

Clients

Media

Political Activity

Profession/ Regulators

Communities Other Stakeholders

Recruits

AGENDA

Introduction Professional Appointments Conflicts of Interest Second Opinions Fees and Other Types of Remuneration Marketing Professional Services Gifts and Hospitality Custody of Client Assets ObjectivityAll Services IndependenceAssurance Engagements

Introduction

A Professional Accountant in practice should not engage in activity that might impair integrity, objectivity and the good reputation of the profession. Compliance with the fundamental principles may potentially be threatened by a broad range of circumstances. The nature and significance of the threats may differ depending on the nature of the professional engagement.

Professional challenges
Some challenging situations members of a professional services firm could face include:

Cosy relationships Billing issues Avoiding/evading tax Sideline business Conflict of interest Investments in clients Confidentiality Client gifts Gender discrimination Excessive revenue targets

Copyright ? ? ? ? ? ? ? ? ?

Professional Appointments

Client Acceptance. Engagement Acceptance. Changes in a Professional Appointment.

Professional Appointments (contd) - Client Acceptance considerations Identify potential threats to compliance with the fundamental principles; Evaluate significance of any threats identified and apply safeguards to eliminate or reduce threat to an acceptable level. Where it is not possible to reduce the threats to an acceptable level, a Professional Accountant should decline to enter into the client relationship. Acceptance decisions should also be periodically reviewed for recurring client engagements.

Professional Appointments (contd) - Engagement Acceptance

A Professional Accountant in public practice should evaluate the significance of identified threats and, if they are other than clearly insignificant, safeguards should be applied as necessary to eliminate them or reduce them to an acceptable level. Such safeguards may include:
      

Understanding the clients business; Understanding the relevant industries or subject matters. Possessing or obtaining experience with relevant regulatory or reporting requirements. Assigning sufficient staff with the necessary competencies. Using experts where necessary. Agreeing on a realistic time frame for the performance of the engagement. Compliance with quality control policies and procedures.

Professional Appointments (contd)

- Changes in professional appointments

A Professional Accountant replacing another Professional Accountant, should determine whether there are any reasons, professional or other, for not accepting the engagement. This may require direct communication with the existing Accountant. An Existing Accountant is bound by confidentiality. Where the threats cannot be eliminated or reduced to an acceptable level a Professional Accountant should, decline the engagement.

Conflict of interest
A Professional Accountant in public practice should take reasonable steps to identify circumstances that could pose a conflict of interest. Such circumstances may give rise to threats to compliance with the fundamental principles. Depending upon the circumstances giving rise to the conflict, safeguards should ordinarily include: (a) Notifying the client of the firms business interest or activities that may represent a conflict of interest, and obtaining their consent to act in such circumstances; or (b) Notifying all known relevant parties that the Professional Accountant in public practice is acting for two or more parties in respect of a matter where their respective interests are in conflict, and obtaining their consent to so act; or (c) Notifying the client that the Professional Accountant in public practice does not act exclusively for any one client in the provision of proposed services (for example, in a particular market sector or with respect to a specific service) and obtaining their consent to so act.

Conflict of interest (contd /2)

The following additional safeguards should also be considered: (a) The use of separate engagement teams; (b) Procedures to prevent access to information (e.g., strict physical separation of such teams, confidential and secure data filing); (c) Clear guidelines for members of the engagement team on issues of security and confidentiality; (d) The use of confidentiality agreements signed by employees and partners of the firm; and (e) Regular review of the application of safeguards by a senior individual not involved with relevant client engagements.

Second opinions

When a Professional Accountant is asked to provide a second opinion that may give rise to threats to compliance with fundamental principles, safeguards should be considered and applied as necessary to eliminate or reduce them to an acceptable level. Such safeguards may include:

seeking client permission to contact the existing accountant; describing the limitations surrounding any opinion in communications with the client; and / or providing the existing accountant with a copy of the opinion.

If the entity seeking the opinion will not permit communication with the existing accountant, the Professional Accountant should consider whether it is appropriate to provide the opinion sought.

Fees and other types of remuneration

A Professional Accountant in public practice may quote whatever fee deemed to be appropriate. Nevertheless, there may be threats to compliance with the fundamental principles arising from the level of fees quoted. Safeguards should be considered and applied as necessary to eliminate them or reduce them to an acceptable level. Safeguards which may be adopted include: Making the client aware of the terms of the engagement and, in particular, the basis on which fees are charged and which services are covered by the quoted fee.

Assigning appropriate time and qualified staff to the task.

Contingent fees
Contingent fees may give rise to threats to compliance to fundamental principles in certain circumstances. The significance of such threats will depend on factors including:

The nature of the engagement; The range of possible fee amounts; The basis for determining the fee; and Whether the outcome or result of the transaction is to be reviewed by an independent third party.

Such safeguards may include: An advance written agreement with the client as to the basis of remuneration; Disclosure to intended users of the work and the basis of remuneration; Quality control policies and procedures; and Review by an objective third party of the work performed by the Professional Accountant.

Contingent fees (contd /2)

A Professional Accountant should not pay or receive a referral fee or commission, unless the Professional Accountant has established safeguards to eliminate the threats or reduce them to an acceptable level. Such safeguards may include:

Disclosing to the client any arrangements to pay a referral fee to another Professional Accountant for the work referred. Disclosing to the client any arrangements to receive a referral fee for referring the client to another Professional Accountant in public practice. Obtaining advance agreement from the client for commission arrangements in connection with the sale by a third party of goods or services to the client.

Marketing professional services

When a Professional Accountant solicits new work through advertising or marketing, there may be potential threats to compliance with the fundamental principles. The Professional Accountant should be honest and truthful and should not:

Make exaggerated claims for service offers, qualifications possessed or experience gained; or Make disparaging references to unsubstantiated comparisons to the work of another.

If the Professional Accountant is in doubt whether a proposed form of advertising or marketing is appropriate, the Accountant should consult with the relevant professional body.

Gifts and hospitality

Self-interest threats to objectivity may be created if a gift from a client is accepted; intimidation threats to objectivity may result from the possibility of such offers being made public. The significance of such threats will depend on the nature, value and intent behind the offer.

If evaluated threats are other than clearly insignificant, safeguards should be considered and applied as necessary to eliminate them or reduce them to an acceptable level. When the threats cannot be eliminated or reduced to an acceptable level through the application of safeguards, the Accountant should not accept such an offer.

Custody of Client Assets

A Professional Accountant in public practice should NOT assume custody of client monies or other assets unless permitted to do so by law and, if so, in compliance with any additional legal duties imposed on a Professional Accountant holding such assets. To safeguard against such threats, a Professional Accountant in public practice entrusted with money (or other assets) belonging to others should:

(a) Keep such assets separately from personal or firm assets; (b) Use such assets only for the purpose for which they are intended; (c) At all times, be ready to account for those assets, and any income, dividends or gains generated, to any persons entitled to such accounting; and (d) Comply with all relevant laws and regulations relevant to the holding of and accounting for such assets.

Objectivity
Independence of mind and in appearance is necessary to enable the Professional Accountant to express an objective conclusion. The Professional Accountant should evaluate the significance of identified threats and, if they are other than clearly insignificant, safeguards should be considered. Such safeguards may include: Withdrawing from the engagement team; Supervisory procedures; Terminating the financial or business relationship giving rise to the threat; Discussing the issue with higher levels of management within the firm; and Discussing the issue with those charged with governance of the client.

Independence

It is in the public interest that members of assurance teams, firms and, when applicable, network firms be independent of assurance clients. Independence requires:
 Independence

of Mind;

 Independence

in Appearance.

Independence (contd /2)

A Conceptual Approach to Independence/1

Members of assurance teams, firms and network firms are required to apply the conceptual framework to the particular circumstances under consideration. In addition to identifying relationships between the firm, network firms, members of the assurance team and the assurance client, consideration should be given to whether relationships between individuals outside of the assurance team and the assurance client create threats to independence. The objective is to assist firms and members of assurance teams in: a) Identifying threats to independence;
b) c)

Evaluating whether these threats are clearly insignificant; and In cases when the threats are not clearly insignificant, identify and apply appropriate safeguards to eliminate or reduce the threats to an acceptable level.

Independence (contd /3)

A Conceptual Approach to Independence/2
Consideration should always be given to what a reasonable and informed third party having knowledge of all relevant information, including safeguards applied, would reasonably conclude to be unacceptable. There are many steps the Professional Accountant in public practice needs to take to ensure that it complies with Independence requirements: -

Independence (contd /4) (Other Key Considerations)

Financial Interests Loans and Guarantees Close Business Relationships with Assurance Clients Family and Personal Relationships Employment with Assurance Clients Serving as an Officer or Director on the Board of Assurance Clients Long Association of Senior Personnel with Assurance Clients Provision of Non-assurance Services to Assurance Clients Valuation Services Provision of Taxation Services Provision of Internal Audit Services to Financial Statement Audit Clients Provision of IT Systems Services to Financial Statement Audit Clients Temporary Staff Assignments to Financial Statement Audit Clients Provision of Litigation Support Services to Financial Statement Audit Clients Provision of Legal Services to Financial Statement Audit Clients Recruiting Senior Management Corporate Finance and Similar Activities Fees and Pricing/overdue fees Gifts and Hospitality Actual or Threatened Litigation

Sample framework to help sustain the Right Behaviors throughout the Firm

TONE AT THE TOP Importance of leadership responsibility, accountability and behavior

Tone at the top Infrastructure

INFRASTRUCTURE Standards, processes, and organization structure help sustain ethical behavior COMPETENCE Selection, development and reward of people/ leaders that subscribe to your standards of ethical behavior

Competence

PROFESSIONAL ACCOUNTANTS IN BUSINESS AND PUBLIC SERVICE

AGENDA

Introduction Potential Conflicts Preparation and Reporting of Information Acting with Sufficient Expertise Financial Interests Inducements

Introduction
A Professional Accountant in Business is someone that first meets the standards of a professional. Second, is recognized as being an Accountant. And third, is in Business, defined as:

Working in an organizational entity of any size and ownership structure, or alone, whether or not operating for profit, other than engaged in external audit; An integral member of, or support to, the management team striving to create and sustain value for stakeholders.

Introduction (contd /2)

The roles that Professional Accountants in Business perform. -The performance of the Professional Accountant in

Business is critical to the reputation and the credibility of the business firm, its management and the accountancy profession. -Professional Accountants need to design and maintain mechanisms to assure that effective, ethical and responsible corporate governance and control is achieved.

Potential Conflicts - Self Interest Threats

Examples of circumstances that may create self-interest threats for a Professional Accountant in business include, but are not limited to:

Financial interests, loans or guarantees. Incentive compensation arrangements. Inappropriate personal use of corporate assets. Concern over employment security. Commercial pressure from outside the employing organization.

Potential Conflicts Familiarity Threats

Examples of circumstances that may create familiarity threats include, but are not limited to:

A Professional Accountant in a position to influence financial or non-financial reporting or business decisions having an immediate or close family member who is in a position to benefit from that influence. Long association with business contacts influencing business decisions. Acceptance of a gift or preferential treatment, unless the value is clearly insignificant.

Potential Conflicts Intimidation Threats

Examples of circumstances that may cause intimidation threats:
Threat

of dismissal or replacement of the Professional Accountant or a close or immediate family member.

dominant personality attempting to influence the decision making process.

Potential Conflicts - Safeguards

Safeguards in the work environment include, but are not restricted to:

The employing organizations systems of corporate oversight or other oversight structures. The employing organizations ethics and conduct programs. Recruitment procedures in the employing organization emphasizing the importance of employing high caliber competent staff. Strong internal controls Appropriate disciplinary processes. Leadership that stresses the importance of ethical behavior and the expectation that employees will act in an ethical manner. Policies and procedures to implement and monitor the quality of employee performance. Timely communication of the employing organizations policies and procedures, including any changes to them, to all employees and appropriate training and education on such policies and procedures. Policies and procedures to empower and encourage employees to communicate to senior levels within the employing organization any ethical issues that concern them without fear of retribution. Consultation with another appropriate Professional Accountant.

Potential Conflicts - Safeguards

Safeguards in the work environment include, but are not restricted to:

The employing organizations systems of corporate oversight or other oversight structures. The employing organizations ethics and conduct programs. Recruitment procedures in the employing organization emphasizing the importance of employing high caliber competent staff. Strong internal controls Appropriate disciplinary processes. Leadership that stresses the importance of ethical behavior and the expectation that employees will act in an ethical manner. Policies and procedures to implement and monitor the quality of employee performance. Timely communication of the employing organizations policies and procedures, including any changes to them, to all employees and appropriate training and education on such policies and procedures. Policies and procedures to empower and encourage employees to communicate to senior levels within the employing organization any ethical issues that concern them without fear of retribution. Consultation with another appropriate Professional Accountant.

Potential Conflicts Safeguards (Contd /2)

In circumstances where the Professional Accountant believes that unethical behavior or actions by others will continue to occur within the employing organization, the Professional Accountant should consider seeking legal advice. In those extreme situations where all available safeguards have been exhausted and it is not possible to reduce the threat to an acceptable level, the Professional Accountant may conclude that it is appropriate to resign from the employing organization.

Preparation & Reporting of Financial Information

A Professional Accountant should present information fairly, honestly and in accordance with relevant professional standards.

The Professional Accountant should maintain information in a manner that:

(a)

Describes clearly the true nature of business transactions, assets or liabilities; Classifies and records information in a timely and proper manner; and Represents the facts accurately and completely in all material respects.

(b)

(c)

Preparation & Reporting of Financial Information (Contd /2)

Threats to compliance with the fundamental principles may be created.

The significance of such threats will depend on factors such as the source of the pressure and the degree to which the information is, or may be, misleading. Where it is not possible to reduce the threat to an acceptable level, Professional Accountants should refuse to remain associated with information they consider is or may be misleading.

Acting with Sufficient Expertise

The fundamental principle of professional competence and due care requires that a Professional Accountant should only undertake significant tasks for which he has, or can obtain, sufficient specific training or experience. Circumstances that threaten professional ability include the following: Timing; Incomplete, restricted or otherwise inadequate information; Expertise/experience; Resources.

Acting with Sufficient Expertise

Safeguards that may be considered include: Training; Adequate timing; Involvement of personnel with relevant expertise; Consulting, where appropriate, with:  Superiors within the employing organization;  Independent experts; or  A relevant professional body. Where the threat cannot be eliminated or reduced, the Accountant should refuse to perform the duties in question.

Financial Interests
Professional Accountants in business may have financial interests, or may know of financial interests of immediate or close family members, that could, in certain circumstances, give rise to threats to compliance with the fundamental principles. Examples of circumstances/situations that may create self-interest threats include:

Direct or indirect financial interest; Is eligible for a profit related bonus; Holds, directly or indirectly, share options in the employing organization; or May qualify for share options or performance related bonuses in the employing organization if certain targets are achieved.

Financial Interests - Safeguards

Safeguards may include: Policies and procedures for a committee independent of management to determine the level of form of remuneration of senior management. Disclosure of all relevant interests, and of any plans to trade in relevant shares to those charged with the governance of the employing organization, in accordance with any internal policies. Consultation, where appropriate, with superiors within the employing organization/ those charged with governance of the employing organization or relevant professional bodies. Internal and external audit procedures. Up-to-date education on ethical issues and the legal restrictions and other regulations around potential insider trading. A Professional Accountant in business should neither manipulate information nor use confidential information for personal gain.

Inducements
Inducements may take various forms including: gifts; Hospitality; preferential treatment; and / or inappropriate appeals to friendship or loyalty. Offers of inducements may create threats to compliance with the fundamental principles. Threats may include: Self interest threats to objectivity or confidentiality; and/ or Intimidation threats to objectivity or confidentiality.

Inducements - Safeguards
Assess the risk associated with all such offers and consider whether the following actions should be taken:
a)

Where such offers have been made, immediately inform higher levels of management or those charged with governance of the employing organization; Inform third parties of the offer for example, a professional body or the employer of the individual who made the offer; a Professional Accountant in business should, however, consider seeking legal advice before taking such a step; Advise immediate or close family members of relevant threats and safeguards where they are potentially in positions that might result in offers of inducements, for example as a result of their employment situation; Inform higher levels of management or those charged with governance of the employing organization where immediate or close family members are employed by competitors or potential suppliers of that organization.

b)

c)

d)

Making Offers

A Professional Accountant in business may be in a situation he is expected to, or is under other pressure to: offer inducements to subordinate the judgment of another individual or organization; influence a decision-making process; or obtain confidential information. Where the pressure to offer an unethical inducement comes from within the employing organization, the Professional Accountant should follow the principles and guidance regarding ethical conflict resolution.

CONCLUSION
Ethics in Action. Questions we should always ask. Next steps.

Ethics in Action
The best of ethical values and intentions are relatively meaningless unless they generate fair and just behaviors in the workplace. That's why practices that generate lists of ethical values, or codes of ethics, must also generate policies, procedures and training that translate those values to appropriate behaviors.

Ethics in Action (contd)

Key Elements and Attributes
Chief Ethics and Compliance Officer Objective To help restore public confidence by motivating and sustaining ethical behavior across your organization Ethical Principles of the Organization Code of Conduct Ethics communication and awareness building Channels for reporting ethical conduct Disciplinary action Leadership commitment and involvement

Questions we should ALWAYS ask ourselves:

Have I consulted appropriately with colleagues and superiors? Are my actions legal and in compliance with the standards of our profession? Am I compromising my integrity or the integrity of my profession, the Institute and clients? Am I upholding the values of the profession? Am I treating others the way I expect others to treat me?

Questions we should ALWAYS ask ourselves: Is my choice of action the most ethical among the possible alternatives? Do I feel good about my choice? If I document my decision, would a reviewer agree with the action I have taken? Would my actions damage the reputation of my self, firm, the Institute and the profession as a whole?

Questions we should ALWAYS ask ourselves:

Are my actions illegal or unethical? Am I being fair and honest? Would I be unwilling or embarrassed to tell my family, friends, or co-workers? Would the company/firms reputation be harmed if the action were revealed in the newspapers? Am I personally uncomfortable about the course of action? Could someones life, health, safety or reputation be endangered by my action? Could the intended action appear inappropriate to a thirdparty?

The IFAC Ethics Code

CONCLUSION If you embrace ethical behaviour, will it automatically make you rich and successful? Of course not. Can it pave the way for you to become successful? Absolutely! Ethics + competence is a winning equation. In contrast, people who continually attempt to test the edge of ethics inevitably go over that edge. Shortcuts never pay off in the long run. It may be possible to fool people for a season, but in the long haul, their deeds will catch up with them because the truth does come out. In the short term, behaving ethically may look like a loss (just as one can temporarily appear to win by being unethical). However, in the long term, people always lose when they live without ethics. Have you ever met anyone who lived a life of shortcuts, deception, and cheating who finished well?

The IFAC Ethics Code

King Solomon of ancient Israel, reputed to be the wisest man who ever lived, said it this way: The ways of right-living people glow with light; The longer they live, the brighter they shine. But the road of wrongdoing gets darker and darker travelers cant see a thing; they fall flat on their faces.

The IFAC Ethics Code

US representative and educational rights advocate Jabez L. M. Curry observed, For a state to prosper must be built on foundations of a moral character, and this character is the principal element of its strength, and the only guarantee of its performance and prosperity. The same can be said of a business, or of a family or of any endeavour you wish to see thrive and endure. However, that foundation cannot be built by the organization as a whole. It must be built beginning with each individual. And it must be done in the face of continuous pressure to perform at the expense of doing the right thing.

The IFAC Ethics Code

Lets go back to basics. How do you know whats right? How do you navigate even the most difficult of pressure filled situations? Where can you find a standard that will work in every situation a guide that will help you to sleep well at night, prosper in business, improve your marriage, and have confidence that you are doing all you can every time? The same person who cheats on his taxes or steals office supplies wants honesty and integrity from the corporation whose stocks he buys, the politician he votes for, and the client he deals with in his own business.

The IFAC Ethics Code

Dear Professional Accountant, do you recall the many questions we have to ask ourselves whenever we have any ethical challenges? The choices are never easy. Dont just go the easy and the most convenient way to save your face in the short run but choose to do the right thing no matter the cost!! Ethics is not just a business issue nor is it a social issue or a political issue. It is always a personal issue.

The IFAC Ethics Code

Remember that the battlefield is never easy but keep in mind also that it is NOT all doors that are opened by God? Good name will forever be better than riches!!!! Remember any person without Standards or Values is empty!

The IFAC Ethics Code

The Code is in three parts as follows:

Part A establishes the fundamental principles of professional ethics for Professional Accountants and provides a conceptual framework for applying those principles. Parts B and C illustrate how the conceptual framework is to be applied in specific situations. Part B applies to professional accountants in public practice. Part C applies to Professional Accountants in business.

Next Steps
Consult, consult, consult!!!!!!!!!!!!!!!!!!! When it come to ethics, please never get tired consulting!!!!!!!!!!!

The IFAC Ethics Code

Welcome to the club, fellow Professional Accountant. Enjoy your various careers and we wish you very well.

Be guided however as success is not an overnight package; it comes with lengthy moments of sweat and toil by doing the RIGHT THINGS over, over, over, over, over, over, over, over, over and over again!

The IFAC Ethics Code

What

you do when you are drunk, you must pay for when you are sober.

[Scottish proverb]

Dont joke with ethics. Its highly inflammable!!!!

END OF PRESENTATION AND THANK YOU VERY MUCH!!!!!!!!