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FINANCIAL REPORTING AND ETHICS6.9 PROFESSIONAL CONDUCT AND THE PUBLIC INTERESTProfessional conduct of accountants and public interest are closely connectedsuch that one can have impact on the other. The chartered accountant mustrealise that unethical practices or any form of professional misconduct wouldjeopardize some or all the interest of the society which he is supposed to protectas a professional.The primary concern should be to ensure that the interests of the public areprotected and maximised, by carrying out their assignments in accordancewith laid down rules and procedures and in compliance with relevant ethicalstandards.6.10 PROFESSIONAL BEHAVIOUR AND INFLUENCE OF STAKEHOLDERSEach stakeholder has a peculiar interest and stake in a business or organisationwhich often time conflict. Each of them is therefore affected by every decision,actions or conducts of a professional accountant. On the other hand, only fewstakeholders can influence directly the professional behaviour of theaccountants. These stakeholders are:(a)(b)(c)The ManagementThe BoardMajor or powerful shareholdersThe Management is the direct employer of the accountant and hence, givesinstructions and directives to the accountant. In other instances, the accountantmight be part of the management.The Board and the shareholder express their interest and seek to actualisethem through the management. In addition to actualising the interests anddesires of the Board and shareholders, management may on their part haveinterests which may conflict with good professional behaviour of the accountant.For instance, much executive compensation is tied to specific performanceparameter. As a result, management might be under pressure to achieve theseparameters and thereby require an unethical conduct from the accountant. Itis in the best interest of the accountant to develop ethical courage to resistsuch pressures.Board members often times are shareholders and management. In thisinstance, they wield much influence or pressure both as management andshareholders. As shareholders, their primary interest would be to see theirshare values constantly appreciate. And as management, their interest wouldbe to declare fantastic result in order to attain the necessary performanceparameter which would guarantee them of an end of the year bonus.136
ETHICAL FRAMEWORK, CONCEPTS AND VALUEPowerful Shareholders are only concerned with maximising theirshare values and as such can have significant influence on theaccountants. The accountants are pressurised to achieve apredetermined result.6.10.1 DilemmaThe Chambers Universal Learners Dictionary defines dilemma as “aposition or situation giving a choice of two courses of action, usuallyboth equally unpleasant.” Both can also be equally pleasant. In ethics,the word may be defined as “a situation in which all the availablecourses of action appear to include morally undesirable as well asmorally desirable aspects.” A situation of dilemma carries the risk ofbeing wrong, on one hand, and the glamour of being right, on the otherhand, with the potentiality of making it or paying for it.Ethical dilemmas tend towards uncertainty. Guidance may be rare toobtain when duties and rights conflict with each other. Nonetheless,honest and down-to-earth discussion on accounting ethics can be useful.The nature of ethics and its framework for accountants would have todo with the business and professional way, practically, rather than thetheoretical or philosophical outlook. To an accountant, therefore, ethicsprovokes his thoughts towards examining his personal values vis-avisthose embodied in his professional activities.ILLUSTRAUSTRATIONTION 6-2In an organisation in which you are the internal auditor, sales promotionactivities are done twice in a year. You are not comfortable with thelittle or no impact which the advertisement is making. To worsen thesituation, grapevine says that the managing director’s wife is one ofthe distributors of the organisation’s product, who collects 30% tradediscount. Would you inform the independent auditor about this?SUGGESTED SOLUTION 6-2This is an ethical dilemma. Loyalty to the company through themanaging director and the need to uphold utilitarianism – the spirit ofworking towards the maximisation of ‘right’ or ‘good’ over ‘wrong’ or‘bad’ – tower over emotional considerations. The two positions are inconflict. The issue poses a dilemma. It is recommended that the internalauditor who is presumed to be an accountant should seek counsel fromThe Institute of Chartered Accountants of Nigeria, before taking any step,so as not to impugn the integrity of the profession.137
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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 147 and 148: 7THE ENVIRONMENT: CORPORATE,PROFESS
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Page 181 and 182: PROFESSIONAL ETHICSA. III onlyB. II
Page 183 and 184: 9DECISION MAKING IN ETHICS9. 0 LEAR
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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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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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