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Unit 4: Section 226, 314 and Code of Ethics

such performance. In formulating their national code of ethics, member bodies should therefore Notes
consider the public service and user expectations of the ethical standards of professional
accountants and take their views into account. By doing so, any existing “expectation gap”
between the standards expected and those prescribed can be addressed or explained.

4.3.1 Objectives

The Code recognizes that the objectives of the accountancy profession are to work to the highest
standards of professionalism, to attain the highest levels of performance and generally to meet
the public interest requirement set out above. These objectives require four basic needs to be
met:-
1. Credibility: In the whole of society there is a need for credibility in information and
information systems.

2. Professionalism: There is a need for individuals who can be clearly identified by clients,
employers and other interested parties as professional persons in the accountancy field.
3. Quality of Services: There is a need for assurance that all services obtained from a
professional accountant are carried out to the highest standards of performance.
4. Confidence: Users of the services of professional accountants should be able to feel confident
that there exists a framework of professional ethics which governs the provision of those
services.

4.3.2 Fundamental Principles

In order to achieve the objectives of the accountancy profession, professional accountants have
to observe a number of prerequisites or fundamental principles. The fundamental principles
are:-

Integrity: A professional accountant should be straightforward and honest in performing
professional services.
Objectivity: A professional accountant should be fair and should not allow prejudice or bias,
conflict of interest or influence of others to override objectivity.
Professional Competence and Due Care: A professional accountant should perform professional
services with due care, competence and diligence and has a continuing duty to maintain
professional knowledge and skill at a level required to ensure that a client or employer receives
the advantage of competent professional service based on up-to-date developments in practice,
legislation and techniques.
Confidentiality: A professional accountant should respect the confidentiality of information
acquired during the course of performing professional services and should not use or disclose
any such information without proper and specific authority or unless there is a legal or
professional right or duty to disclose.
Professional Behaviour: A professional accountant should act in a manner consistent with the
good reputation of the profession and refrain from any conduct which might bring discredit to
the profession. The obligation to refrain from any conduct which might bring discredit to the
profession requires IFAC member bodies to consider, when developing ethical requirements,
the responsibilities of a professional accountant to clients, third parties, other members of the
accountancy profession, staff, employers and the general public.
Technical Standards: A professional accountant should carry out professional services in
accordance with the relevant technical and professional standards. Professional accountants

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