CODE OF ETHICS

& Key Principles

ROSALINDA EVANGELISTA
Resource Person

ETHICAL REQUIREMENTS

To provide
guidance on the
fundamental
principles
which define
professional
ethics

Code of Ethics for Professional Accountants

This Code of Ethics for Professional Accountants (IESBA Code) establishes ethical
requirements for professional accountants.
A member body of IFAC or firm shall 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 shall comply with all other parts of this Code.
Some jurisdictions may have requirements and guidance that differ from those
contained in this Code.
Professional accountants in those jurisdictions need to be aware of those differences
and comply with the more stringent requirements and guidance unless prohibited by
law or regulation.
11.11.2014

Code of Ethics for Professional Accountants:

Introduction
A distinguishing mark of the accountancy profession is its acceptance of the
responsibility to act in the public interest.
Therefore, a professional accountant's responsibility is not exclusively to satisfy the
needs of an individual client or employer.
In acting in the public interest, a professional accountant shall observe and comply
with this Code of Ethics.

This Code contains three parts:

Part A establishes the fundamental principles of professional ethics for
professional accountants and provides a conceptual framework for
professional accountants.
Parts B and C describe how the conceptual framework applies in certain
situations. They provide examples of safeguards that may be appropriate to
address threats to compliance with the fundamental principles. Part B applies
to professional accountants in public practice. Part C applies to professional
accountants in business.
11.11.2014

Code of Ethics for Professional Accountants:

Introduction
A distinguishing mark of the accountancy profession is its acceptance of the
responsibility to act in the public interest.
Therefore, a professional accountant's responsibility is not exclusively to satisfy the
needs of an individual client or employer.
In acting in the public interest, a professional accountant shall observe and comply
with this Code of Ethics.

This Code contains three parts:

Part A establishes the fundamental principles of professional ethics for
professional accountants and provides a conceptual framework for professional
accountants.
Parts B and C describe how the conceptual framework applies in certain
situations. They provide examples of safeguards that may be appropriate to
address threats to compliance with the fundamental principles. Part B applies to
professional accountants in public practice. Part C applies to professional
accountants in business.
11.11.2014

Code of Ethics for Professional Accountants:

Introduction

OBJECTIVITY

PROFESSIONAL
COMPETENCE
AND DUE CARE

INTEGRITY

PROFESSIONAL
BEHAVIOR

CONFIDENTIALITY

Code of Ethics
for
Accountants

The Nature of Ethics

A formal policy of rules and

guidelines that describes the
standards of conduct that a
company expects from all its
accountants.
Glencoe Accounting

Ethics
Distribution of a
written code

Training and
Outreach
Formal training

Ethics
Performance
Appraisal Notes

Termination

Probation

Enforcement

Demotion

Suspension

Ethics
The Accountants Role
Avoid harm to stockholders.
Optimize the interests of the public.

Adhere to universal standards of what is right.

Respect the human rights of all people.

Ethical Behavior

Individuals

Acting ethically can increase self-esteem, contentment, and

self-respect.

Businesses

Companies that made commitments to an ethics code

provided twice the value to shareholders than those that
did not.

Society

Society is the sum of all social relationships between humans

and is only as ethical as the individuals and business that
make it up.

Key Terms
integrity
objectivity
independence
competence
confidentiality

integrity
The principle that
requires accountants to
choose what is right and just
over what is wrong.
Integrity

Confidentiality

Key
Principles

Competence

Objectivity

Independence

Key Principles

Key Principles
Section 29.2

Ethics in the
Accounting Profession

Integrity

Confidentiality

Key
Principles

Competence

Objectivity

Independence

objectivity
The principle that
requires accountants to
be impartial, honest, and free
of conflicts of interest.

Key Principles

Integrity

Confidentiality

Key
Principles

Competence

Objectivity

Independence

independence
The principle that
requires accountants to have
no financial interest in the
company being audited.

Key Principles

Integrity

Confidentiality

Key
Principles

Competence

competence
The principle that requires
accountants to have the
knowledge, skills, and
experience needed to
complete a task.

Objectivity

Independence

Key Principles

confidentiality
The principle that requires
accountants to protect and
not disclose information
acquired in the course of
work unless they have the
appropriate legal or
professional responsibility to
do so.

Integrity

Confidentiality

Key
Principles

Competence

Objectivity

Independence

Codes of Ethics

Philippine Institute
of Certified Public
Accountants

Board of
Accountancy

Professional
Regulation
Commission

Sarbanes-Oxley Act
Sarbanes-Oxley Act (SOX)

Effective 2002, SOX

protects investors after
several corporate scandals
failed to be identified and
prevented by auditors.

SOX requires CEOs,

financial officers,
accountants, and auditing
firms to comply with new
regulations and
procedures.

SOX established an
accounting board to
oversee and investigate
the audits and auditors of
public companies.