Financial Reporting and Ethics - The Institute of Chartered ...

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FINANCIAL REPORTING AND ETHICSresembles a deontological principle - the issue of obligation or duty. Theprinciple of objectivity evokes the challenge to be impartial, to displayintellectual integrity in reporting and which is devoid of conflicts of interest.In order to safeguard independence, there has to be preclusion of relationshipswhich may hinder objectivity in rendering services of attestation.6.5 THE FOUNDATION OF THE ACCOUNTING PROFESSIONThe accountant holds a fiduciary position; he is an agent of his employers orclients. The foundation of the profession therefore is trust. Shareholders basetheir assessment of the financial reality and performance of their company onthe report of the external auditors. Potentials investors also would rely on thereports of auditors to make huge investment decisions. In all of these, for theaccountant to enjoy continuous confidence and trust, he must at all timemaintain high ethical standard in his job.Suffice it therefore to say that, the value of the accounting profession can onlybe main through a sound understanding and application of ethical principles.6.6 ETHICS AND THE PROFESSIONA profession is not a mere vocation or occupation. It is a specialized area oftraining, skills acquisition and knowledge attainment which makes a personan expert in the field. The characteristics of a profession include the following:(a) Having to undergo an educational process where discrete and edifyingbody of knowledge is acquired, most of the time with having to passexaminations;(b) The need to be a member of a professional association and licensed topractice;(c) The profession should have a code of ethics and a set of technicalstandards; and(d) The profession owes the larger society a lot of social and moralobligations.6.6.1 Ethics and the Professional AccountantIn the performance of his professional duties, a chartered accountantshould comply with the ethical stipulations of the Institute of CharteredAccountants of Nigeria and those of International Federation ofAccountants. A serious issue of reference is the International Standardon Auditing No. 200 which carries the title “Objectives and GeneralPrinciples of Audit”. It stipulates that “in the conduct of any audit offinancial statements, auditors should comply with the ethical guidanceissued by their relevant professional bodies.”132
ETHICAL FRAMEWORK, CONCEPTS AND VALUEThe moral dictates which cover the professional responsibilities ofauditors apply with equal force and effect to every chartered accountantin every sphere of non-audit duties. The International Federation ofAccountants has its own Code of Ethics for professional accountants.The Institute of Chartered Accountants of Nigeria is a member of theInternational Federation of Accountants (IFAC). There is a Code ofprofessional Conduct of Members which ICAN issued and which borrowsfreely from and agrees with the guidelines of International Federationof Accountants (IFAC). Some of the ethical standards are unwritten.Paragraph 5 of the Introduction to ICAN’s Code states that “the guidanceon professional conduct is not exhaustive”. Members are, therefore,admonished to “be guided not merely by the terms, but also by thespirit of this Guide and the fact that a particular conduct does not appearamong a list of examples does not prevent it from amounting tomisconduct.” In addition, paragraph 20 of the same section of theCode states that “a member who is in doubt as to his or her ethicalposition in any matter may seek the advice of the Institute through theRegistrar/Chief Executive.”6.7 ACCOUNTANTS ANTS AND THEIR STAKEHOLDERS6.7.1 The Stakeholders of AccountantsA stakeholder, in business is any person or group that has a stake in anorganisation. A stakeholder can also be described as any person or groupof persons that may be affected by the action or inaction of any otherperson or group of persons.The stakeholders of Accountants are the users of the information whichthey generate and on which the public rely. Some of the stakeholders tothe accounting profession include:(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l)The general publicShareholders- potential and existingGovernment at various levelsCreditorsDebtorsEmployeesManagementThe international communityDonor agenciesMultilateral institutionsThe instituteRegulatory authoritiesThe stakeholders and their interest areas include the following:133
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FINANCIAL REPORTING AND ETHICS1.3.3
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ACCOUNTING AND REPORTING POLICIESsu
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ACCOUNTING AND REPORTING POLICIES(j
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ACCOUNTING AND REPORTING POLICIES(i
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ACCOUNTING AND REPORTING POLICIES2.
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3AMALGAMATION, ABSORPTION ANDRECONS
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AMALGAMATION, ABSORPTION AND RECONS
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4ANALYSIS AND INTERPRETATION TION O
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ANALYSIS AND INTERPRETATION OF FINA
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Page 89 and 90: 5ACCOUNTING STANDARDS5.0 LEARNING O
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Page 109 and 110: ACCOUNTING STANDARDS(v)Actions requ
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Page 113 and 114: 6ETHICAL FRAMEWORK, CONCEPTSAND VAL
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Page 147 and 148: 7THE ENVIRONMENT: CORPORATE,PROFESS
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Page 171 and 172: 8PROFESSIONAL ETHICS8. 0 LEARNING O
Page 173 and 174: PROFESSIONAL ETHICSobjectivity are
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Page 177 and 178: PROFESSIONAL ETHICSabout conflicts
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Page 181 and 182: PROFESSIONAL ETHICSA. III onlyB. II
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9DECISION MAKING IN ETHICS9. 0 LEAR
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DECISION MAKING IN ETHICS9.2 A FRAM
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ETHICAL THREATS AND SAFEGUARDS(d)We
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DECISION MAKING IN ETHICS4. A perso
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10ETHICAL THREATS TS AND SAFEGUARDS
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ETHICAL THREATS AND SAFEGUARDS(iv)(
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ETHICAL THREATS AND SAFEGUARDSto th
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ETHICAL THREATS AND SAFEGUARDSpayab
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ETHICAL THREATS AND SAFEGUARDS(a)Fi
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ETHICAL THREATS AND SAFEGUARDSimmin
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ETHICAL THREATS AND SAFEGUARDSHowev
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ETHICAL THREATS AND SAFEGUARDS(iii)
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11CORPORATE GOVERNANCE11.0 LEARNING
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CORPORATE GOVERNANCE11.3.1 Nature(a
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CORPORATE GOVERNANCEThe company sho
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CORPORATE GOVERNANCEtrust, possible
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CORPORATE GOVERNANCEAn agent has im
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CORPORATE GOVERNANCE(a)(b)(c)(d)(e)
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CORPORATE GOVERNANCE11.6.1 The law
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CORPORATE GOVERNANCEILLUSTRAUSTRATI
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CORPORATE GOVERNANCEimitated. They
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CORPORATE GOVERNANCE(a)(b)Greenbury
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CORPORATE GOVERNANCE11.9.2 Boards d
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CORPORATE GOVERNANCErelationship wi
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CORPORATE GOVERNANCE(e)(f)(g)(h)(i)
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CORPORATE GOVERNANCE(vi)Inquisitive
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CORPORATE GOVERNANCE(e)ConsultancyA
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CORPORATE GOVERNANCEThe incoming au
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CORPORATE GOVERNANCEIn summary, acc
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CORPORATE GOVERNANCEAccording to Th
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CORPORATE GOVERNANCE3. A body corpo
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12SOCIAL AND ENVIRONMENTALISSUES IN
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SOCIAL AND ENVIRONMENTAL ISSUES IN
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APPENDIX ISUGGESTED SOLUTIONS TO RE
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SUGGESTED SOLUTIONS TO REVISION QUE
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SUGGESTED SOLUTIONS TO REVISION QUE
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APPENDIX IICOMPREHENSIVE QUESTIONS
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COMPREHENSIVE QUESTIONS AND SUGGEST
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APPENDIX IIICASE STUDY 1Karsashi, a
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CASE STUDIES(iii)(iv)The floor sale
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CASE STUDIESShare price and dividen
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CASE STUDIESSUGGESTED SOLUTION(A) A
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CASE STUDY 3The following informati
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CASE STUDIESCASE STUDY 4Ologobojo i
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APPENDIX IVTable 1:SUMMARY OF INTER
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SUMMARY OF INTERNATIONAL ACCOUNTING
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APPENDIX VGLOSSARY OF TERMSAbsorpti
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GLOSSARY OF TERMSEthical Objectivis
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APPENDIX VIBIBLIOGRAPHYChambers Ham
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APPENDIX VIISTUDY AND EXAMINATION T
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STUDY AND EXAMINATION TECHNIQUES7.3
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INDEXAAbsorption, 17, 19, 39, 40, 4
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INDEXProfessional Behaviour, 136, 1
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