1. CODE OF CONDUCT FOR PROFESSIONAL ACCOUNTANTS
INTERNATIONAL ETHICS STANDARDS BOARD FOR ACCOUNTANTS
( IESBA )

2. TODAY’S AGENDA INTRODUCTION
HIGHLIGHTS OF THE CODE OF ETHICS FOR PROFESSIONAL ACCOUNTANTS – IESBA
CONCLUSION

3. INTRODUCTION
NOTE:
The distinguishing mark of the Accountancy profession is its acceptance of the profession’s responsibility to act in the public interest.
The Code of Conduct for Professional Accountants is contained in the Code of Ethics issued by the International Ethics Standards Board of IFAC. Tanzania has adopted it fully

4. INTRODUCTION ( CONT. )
The Code of Ethics is binding to all members of the profession i.e. members in public practice ( partners and staff ) and those in business and public service

5. INTRODUCTION ( CONT. ) IESBA CODE OF ETHICS :-
PART A : General Application of the IESBA
Code to all Professional Accountants
PART B: Application of the IESBA Code to
Professional Accountants in Public
Practice
PART C: Application of the IESBA Code to
Professional Accountants in Business

6. IESBA CODE OF ETHICS FOR ACCOUNTANTS
The Conceptual framework approach assists Professional Accountants in complying with Ethical requirements of the Code of the Ethics and thereby meeting their responsibility to act in the Public Interest.

7. GENERAL APPLICATION OF THE IESBA CODE
PART A OF THE CODE ESTABLISHES:
Fundamental Principles of Professional Ethics for Professional Accountants
and provides
Conceptual Framework to be applied by Professional Accountants in order to identify, evaluate threats and apply safeguards to eliminate or reduce the threats to an acceptable level
The Professional Accountant shall use professional judgement in applying this conceptual framework

8. PART A FUNDAMENTAL PRINCIPLES:
Integrity: This requires the Professional
Accountant to
to be straight forward and honest
not to be associated knowingly with reports, returns, communication etc. where the accountant believes are materially false or misleading; or recklessly furnished; or omits or obscures information
The remedy for the Accountant: Provide a modified report in respect of the matters in question

9. PART A FUNDAMENTAL PRINCIPLES: ( Cont. )
2)Objectivity: This requires the Professional Accountant not to compromise professional judgment because of bias, conflict of interest or undue influence of other parties

10. PART A FUNDAMENTAL PRINCIPLES: ( Cont. )
3) Professional Competence and Due Care
This imposes the following obligations to the
Professional Accountant to:
Maintain professional knowledge and skill at
required levels
Act diligently according to applicable
technical and professional standards
Ensure that those working under him/her have
appropriate training and supervision
Tell the client his/her limitations

11. PART A FUNDAMENTAL PRINCIPLES: ( Cont. ) 4) Confidentiality
This imposes an obligation to the Professional
Accountant to refrain from:
Disclosing confidential information without specific authority
Using confidential information for personal advantage or advantage of third parties

12. PART A
FUNDAMENTAL PRINCIPLES: ( Cont. ) 5) Professional Behavior This imposes an obligation to the Professional Accountant to comply with relevant laws and regulations and avoid any action which may discredit the profession. Therefore members shall behave with courtesy and consideration towards those with whom they come into contact in a professional capacity

13. PART A
IESBA ESTABLISHES CONCEPTUAL FRAMEWORK APPROACH Because professional accountants operate in different circumstances and the nature of their engagements and work assignments may differ and therefore: Impossible to define every situation and every threat faced by the accountant

14. PART A CONCEPTUAL FRAMEWORK APPROACH
This approach requires the Professional Accountant to :
Identify threats to compliance with Fundamental Principles
Evaluate the significance of the threats and
Apply safeguards to eliminate the threats or reduce them to acceptable levels
Note the following:

15. PART A
Categories of threats to Compliance with Fundamental Principles:
Self interest threats
Self review threats
Advocacy threats
Familiarity threats
Intimidation threats

16. PART A
The professional accountant must identify, evaluate and apply safeguards which may eliminate threats or reduce them to an acceptable level.
Safeguards fall into two categories:
Safeguards created by the profession, legislation or regulation
Safeguards in the work environment
NBAA’s Code of Ethics has provided a lot these safeguards.

17. PART A CONFLICTS IN COMPLYING WITH FUNDAMENTAL PRINCIPLES:
Conflicts may be with or within the organization where a professional activity takes place. A threat to objectivity or other fundamental principles may arise; e.g.
Activity done for conflicting parties
Conflict of interest between the accountant and the client

18. PART A ETHICAL CONFLICT RESOLUTION
When considering to resolve a conflict in complying with the Fundamental Principles,
the following factors may be relevant:
Relevant facts
Ethical issues involved
Fundamental Principle in question
Established internal procedures
Alternative courses of action available
Note: Where the matter involves a conflict with the organisation or within the entity, you must determine whether to consult those charged with governance. In all cases, document the matter, discussions held and decisions etc. If the conflict cannot be resolved, consult your legal advisor or the professional body ( NBAA ). If, after all the above the conflict remains unresolved, refuse to be associated with the matter.

19. PART B: APPLICATION OF THE IESBA CODE TO
PART B: APPLICATION OF THE IESBA CODE TO PROFESSIONAL ACCOUNTANTS IN PUBLIC PRACTICE
This part provides guidelines on how the Conceptual Framework Approach in Part A is applied to various situations faced by the Professional Accountant in Public Practice. Threats fall in one or more of the following categories:
Self-interest
Self-review
Advocacy
Familiarity and
e) Intimidation
Note: A Professional Accountant in Public Practice shall not knowingly engage in any business, occupation or activity that impairs or might impair integrity, objectivity or the good reputation of the profession and as a result would be incompatible with the Fundamental Principles.

20. PART B Professional Appointment
This section provides guidelines on threats and safeguards with regard to:
Client Acceptance
Engagement Acceptance
Changes in a Professional Appointment

21. PART B
Conflicts of Interest This section sets out the obligation of the Professional Accountant to identify circumstances which may create threats of conflict of Interest, evaluate the significance of any threats and apply safeguards or additional safeguards.

22. PART B
Conflicts of Interest faced by the Professional Accountant in Public Practice which create threats to objectivity and which may create threats to the other Fundamental Principles:
Providing services to clients whose interests on the particular matter are in conflict; e.g.
Providing services to a client whose interest and that of the accountant on the matter are in conflict. e.g.

23. PART B What the Professional Accountant in Public Practice should do:
When identifying and evaluating the interests and relationships, exercise professional judgment
When addressing conflicts of interest, remain alert to the Fundamental Principle of Confidentiality

24. PART B
What to do:
If the threat created by a conflict of interest is not at acceptable level, apply safeguards to eliminate or reduce the threat, if not decline or discontinue the professional relationship
Before accepting a new engagement take steps to identify circumstances which might create a conflict of interest. These include nature of relationship, the service and the parties

25. PART B What to do: ( cont. )
Have an effective conflict identification process in order to identify actual or potential conflicts of interest before accepting or continuing an engagement. The process of identifying conflicts depends on nature of services to be provided, size of the firm, size and nature of client and structure of the firm

26. PART B What to do: ( cont. )
If a conflict of interest has been identified, evaluate the
the significance of the interests or
relationship and
the significance of the threats created by
performing the professional services

27. PART B What to do: ( cont. )
When there are threats to compliance with Fundamental Principles created by conflict of interest, apply safeguards, such as:
a) mechanism to prevent unauthorised disclosure of confidential information
b)regular review of the safeguards
c)get somebody independent to review the
work performed
d) consult third party

28. PART B What to do: ( cont. )
Disclose the nature of the conflict of interest and related safeguards to the client affected by the conflict. Forms of disclosure include:
a) General disclosure to clients
b) Specific disclosure to affected clients
Obtain the client’s consent to the accountant performing the professional services

29. PART B
Second Opinion: Where a Professional Accountant in Public Practice is asked for second opinion, he/she shall identify and evaluate the significance of any threats to compliance with Fundamental Principles and apply appropriate safeguards.
Example of such a threat is a threat to Professional Competence and due care. In this case the safeguard may be to seek client permossion to contact the existing accountant.

30. PART B
Fees and Other Types of Remuneration: Fees may create threats to compliance with Fundamental Principles e.g. a self-interest threat to professional competence and due care if the fee quoted is too low.
Note: The fact that one professional accountant may quote a fee lower than an other is not in itself unethical.

31. PART B
Marketing Professional Services: A Professional Accountant in Public Practice shall be honest and truthful when marketing his/her professional services. Do not make exaggerated claims in respect of services offered, qualifications and experience Do not make references to the work of others
Note: If you are in doubt about the proposed form of advertising, consult your professional body – see Sect 30 & 32 of the NBAA Code of Ethics

32. PART B
Gifts and Hospitality: Offers of gifts and hospitality from clients may create threats to compliance with Fundamental Principles e.g. threat to objectivity Evaluate the significance of the threat and apply safeguards. If threats cannot be eliminated or reduced, do not accept such an offer

33. PART B
Custody of Client Assets: A Professional Accountant in Public Practice shall not assume custody of client monies or assets unless permitted by law. Threats created by this include self-interest threat to professional behavior and of objectivity. Safeguards include: Keeping client assets separate and use them only for the intended purpose. Comply with the law
Note: Keep proper records of client monies and assets held and be ready to account for them at all times

34. PART B
Objectivity - All Services: A Professional Accountant in Public Practice shall determine, at the outset, whether there are threats to compliance with the Fundamental Principle of Objectivity because of the relationships with directors, officers or employees. A Professional Accountant must be Independent in Mind and in Appearance
Note: It is important to evaluate the significance of the threat and apply safeguards, such as, withdrawing from the engagement, terminating the business or financial relationship. Also consider discussing it with higher management or those charged with governance.

35. PART B
INDEPENDENCE: Independence Requirements For Audit and Review Engagements have the objective of assisting firms and members of audit teams in applying the Conceptual Framework approach to achieving and maintaining Independence. I.E. Independence of Mind and Independence in Appearance

36. PART B
INDEPENDENCE: Independence Requirements for Other Assurance Engagements which are not audit or review engagements. Compliance with the Fundamental Principle of Objectivity requires being Independent of assurance clients. It is in the public interest and therefore required by the Code of Ethics that firms and members of the assurance team be independent of the client.

37. PART C: APPLICATION OF THE IESBA CODE TO PROFESSIONAL ACCOUNTANTS IN BUSINESS
This Part explains the Application of Conceptual Framework Approach to Professional Accountants in Business. Investors, employers and the public may rely on the work of a Professional Accountant. There are various forms of relationships with an employer, e.g. as a salaried employee or director Threats to compliance with Fundamental Principles may therefore exist
Threats may be : self-interest, self-review, advocacy, familiarity and intimidation. Appropriate safeguards must be applied to eliminate threats or reduce them to acceptable levels.

38. PART C
1. Conflicts of Interest: A professional accountant in business may be faced with a conflict of interest when undertaking a professional activity. Threats created by the conflict may occur when: a) The accountant undertakes professional activity for parties with conflicting interests b) The interest of the accountant and those of the other party are in conflict
Note: The party for whom the professional accountant is undertaking a professional activity may be an employing organization, a vendor, a customer, a lender, ashareholder or an other party. In any case the professional accountant shall not allow a conflict of inerest to compromise professional or business judgment.

39. PART C
What to do:
Apply professional judgment when identifying and evaluating the interests and relationships
Seek guidance when addressing a conflict of interest. Guidance from within the employing organization or from others
Apply safeguards to eliminate the threat or to reduce it to acceptable level
In identifying whether a conflict exist or may exist, the accountant shall take steps to determine the nature of relevant interests and the relationships between the parties involved. Also determine the nature of the activity and its implication for the parties.

40. PART C What to do: ( cont. )
Apply one or more of the following safeguards:
a) Restructuring or segregating certain duties
b)Obtaining appropriate oversight
c)Withdraw from the decision-making process
d)Consult with third parties e.g. NBAA, legal
counsel or an other accountant
It is necessary to disclose the nature of the conflict of interest to the relevant parties and when safeguards are required, to obtain their consent to undertake the professional activity.

41. PART C
2. Preparation and Reporting of Information: Financial information shall be prepared and presented fairly, honestly and in accordance to professional standards. Threats to compliance with Fundamental Principles may exist e.g. self- interest or intimidation threats to integrity, objectivity or professional competence or due care The significance of the threats should be evaluated and necessary safeguards applied
Note: Where it is not possible to reduce the threats to acceptable level, the professional accountant shall refuse to be associated with the information

42. PART C
What to do:
Be alert to the principle of integrity, which imposes an obligation to be straightforward and honest in all business and professional relationships
Evaluate the significance of the threat and apply safeguards when necessary e.g. consult with superiors or the audit committee etc.
The significance of threats to compliance to Fundamental Principles will depend on factors such as the source of the pressure and the corporate culture within the organisation.

43. PART C What to do: ( cont. )
Refuse to be or remain associated with misleading information
Take steps to disassociate yourself from the misleading information if you have been associated with it unknowingly
Obtain legal advice to determine whether to report the circumstances outside the organization

44. PART C
3. Acting with Sufficient Expertise: A professional Accountant shall not mislead an employer as to the level expertise or experience possessed. Be ready to seek appropriate expert advice or assistance Threats to compliance may be created by insufficient time, information, experience and even resources. Appropriate safeguards shall be applied.

45. PART C
4. Financial Interests, Compensation and Incentives Linked to Financial Reporting and Decision Making A Professional Accountant may have financial interests in the entity, e.g. shares, share options, profit related bonuses etc. Self-interest threats arising from compensation and incentives may be compounded by pressure from superiors or peers
Note: Do not manipulate or use confidential information for personal gain.

46. PART C
What to do:
Be particularly alert to the principle of integrity which imposes an obligation to be straightforward an honest in all professional and business relationships
Evaluate the significance of any threat created and safeguards applied. In doing so, evaluate the nature and significance of the interest. Examples of safeguards to be applied:
Examples of safeguards: 1) Policies and procedures for independent committee to determine senior management remuneration 2)Disclosure of all relevant interests 3) Consultation with superiors 4) Consultation with those charged with governance 5) Internal and external audit procedures 6) Education on ethical issues and legal restrictions

47. PART C
5. Inducements: 5(a)Receiving Offers Offers of inducements may create threats to compliance with Fundamental Principles. Evaluate the significance of any threat and apply safeguards when necessary e.g. inform higher level of management, inform third party e.g. professional body
Note: If offers are made to immediate family members, discuss the matter with them and advise them accordingly.

48. PART C
5. Inducements: 5(b) Making Offers A Professional Accountant may be in a situation where he/she is expected or under pressure to offer an inducement Do not offer an inducement to improperly influence professional judgment of a third party
Note: If pressure comes from within the employing organisation, follow the principles and guidelines set out in Part A of the Code of Ethics

49. In conclusion: Stay updated by attending CPD programs
Remember: Ignorance is no Defense.

50. THANK YOU AND BEST WISHES Simon C. Mponji