Changes to the Guide to Professional Ethics

Article Abstract:

The Institute of Chartered Accountants in England and Wales has introduced revisions to its Guide to Professional Ethics. The amendments paid particular attention on two areas: expert services and conflicts of interest. Audit firms or similar entities that provide expert services that directly influence the amounts and disclosures contained in the financial statements of a client are subject to a self-review threat to objectivity. Firms should document the rationales behind their decisions and record their safeguards. Firms should also make sure that they can manage any conflict of interest through the introduction of the proper safeguards, such as disclosure of the circumstances of the conflict, recommendation that the client seek other independent advice, and permission from the client to act through informed consent.

Standards, Accounting, Institute of Chartered Accountants in England and Wales, Conflict of interests (Agency), Professional ethics, Conflicts of interest

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They should be; but are they?

Article Abstract:

There is an increasing interest in integrated audit in the UK. This practice involves the outsourcing of internal audit, thereby resulting in its combination with external audit. The promise of integrated audit is irresistible to both parties involved. For auditing firms, this presents an opportunity to increase their fees. Client companies, on the other hand, enjoy getting rid of their non-core management layers and thus reducing their costs. However, there is fear that ethical issues may be overlooked as a result of overenthusiasm with internal audit. There is a lingering doubt regarding the independence of a firm that will take on both internal and external audits. These companies would have to address this concern to remove uncertainty regarding this practice.

Auditing, Practice, Auditors, Internal auditing

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Whiter than white?

Article Abstract:

Brunel University's political philosophy professor Barbara Goodwin has conducted a study investigating the practice of ethics in the accountancy profession in the UK. She chose to focus on this field because of its unique combination of contemporary commercialism and traditional professionalism that emphasizes high standards. Her findings suggest that British accountancy is highly regulated and that large accounting firms subscribe to high ethical standards. The results also indicate that it may be the smaller firms that are in greater need of regulatory guidance. Goodwin's study concludes that accountants can be kept ethical if ethical rules, regulations, procedures and professional training are provided.

Research, Accounting firms, Accounting services, Business ethics

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