ICAEW Institute of Accountants Banquet Hall 9.00am Concurrent Session 1A Ethical Practice - Black, White or Grey? Mr. Mark Billington Regional Director, South East Asia, Institute of Chartered Accountants in England & Wales (ICAEW)

Ethical practice: black, white or grey? Mark Billington 14 October 2009

ICAEW About the ICAEW Founded in ,000+ members in 160 countries Work in public practice, public sector and industry Royal Charter – the public interest and the title Chartered Accountant ICAEW acts as regulator, regulatee and professional member body

ICAEW South East Asia Long time collaboration with Malaysia City Group 30 Authorised Training Employers in Malaysia Malaysia (2004), Singapore (2008), South East Asia Office (2009)

ICAEW Ethics …. Is not corporate governance, corporate responsibility or sustainability Is values and principles acceptable to society Is concerned with human character and behaviour Goes beyond obeying laws, rules and regulations

ICAEW Why is ethics important? Markets Information Trust Mechanisms T MMO

ICAEW Ethics in the wider business sphere Need? Enron Maxwell Banks Professional influence No overall control Accountants in roles Persuasion National Integrity Plan

ICAEW Corporate Responsibility Research with Peking University Finance & Management Financial Services Finance direction Inspiring confidence in financial services Corporate Finance Financing change Risk Management Thought leadership Corporate Finance Corporate Governance Information Technology re:Assurance Audit quality forum Tax Market Foundations Dialogue in corporate governance Sustainable Business Towards a better tax system Making information systems work Information for better markets

ICAEW Market foundations Professions Legal entities Public interestRegulation Ethical behaviour Economic crime

ICAEW Ethical behaviour Integrity focus: -Reporting with integrity -Instilling integrity in organisations

ICAEW Is there always a ‘right’ answer? Example: truth or feelings? Example: maintain confidence or endorse error?

ICAEW Achievements Qualities Commitments Motives Moral values Leadership Strategy Policies Information Culture Drivers of organisational integrity Be honest and truthful Be fair Comply with laws Promote community interests Be open and adaptable Take corrective action Show consistency

ICAEW Objectivity Consider threats Apply safeguards… IFAC Code of Ethics Short description of core approach Integrity Plus some illustrative examples …or don’t do it Confidentiality Professional behaviour Professional Competence & due care A few prohibitions

ICAEW Framework for Ethical Decision-Making  Do I have all the facts relevant to this situation?  Who should be involved in the discussions?  What are the ethical issues involved?  What are the alternative courses of action and their associated consequences?

ICAEW Example of rules based approach The rule of unintended consequences!

ICAEW Why principles over rules? Avoids ‘its ok unless prohibited’ argument Recognises reality: manage conflicts Not easy option for users or regulators, but… Can apply to Infinite circumstances Shorter and easier to learn Avoids legalistic ‘form over substance’ compliance

ICAEW Infrastructure – what we do License, or PC Monitoring Education, inc. CPD Discipline Support Transparency

ICAEW Auditor independence Public focus Regulatory involvement Lots of rules Harmonise around IFAC?

ICAEW Conclusion: ethical practice is…. Often seen to be But it is and should be Black and white Grey