1. PROFESSIONAL ETHICS

2. LEARNING OUTCOMES
Describe the purposes for which cost information is required
Distinguish data from information
Identify the characteristics of quality information
Identify sources of information
Define and illustrate a cost unit and cost centre
Explain and illustrate production and non- production costs
Describe the elements of non-production costs: Administration, Selling, Distribution and Finance

3. LEARNING OUTCOMES
Describe the elements of production costs: Material, Labour and Overheads
Explain and illustrate the classification of costs by Function, Nature, Elements
Illustrate graphically cost behaviour
Use the High-Low method to separate total cost into Fixed and Variable costs
Define and illustrate responsibility centres: Cost, Profit and Investment
Identify how overheads are charged to responsibility centres
Calculate overhead absorption rates

4. ETHICAL CONFLICTS Principles-based approach Identify Evaluate
Apply safeguards
Rules-based approach
Literally going by the rule/law

5. ETHICAL CONFLICTS Objectivity Independence
Freedom from control or influence by others
Independent in mind
consider the information that is only relevant to the job at hand
Independent in appearance
must be seen to be independent

6. ETHICAL CONFLICTS Objectivity Accepting Gifts/Hospitality
There is a risk that the gifts could influence the accountant’s performance
Accept? YES or NO?
Use professional judgement

7. ETHICAL CONFLICTS Objectivity Inducements
Something offered to encourage or motivate a person to do something.
Examples
gifts, hospitality, preferential treatment, friendship

8. ETHICAL CONFLICTS Objectivity Safeguard Inform higher management
Inform third party – AAT, professional body
Inform higher management of the inducer

9. ETHICAL CONFLICTS Objectivity Fraud
criminal deception intended to result in financial/personal gain
Fraud Act 2006 – 3 acts:
false representation
failing to disclose
abuse of position

10. ETHICAL CONFLICTS Objectivity Bribery
“giving or receiving something of value with intention of influencing the recipient to do something favourable to the giver”

11. ETHICAL CONFLICTS Objectivity Bribery Act 2010 – 4 acts: Penalties
bribing another
receiving a bribe
bribing a foreign official
Failing to prevent a bribe
Penalties
10 years imprisonment and/or
An unlimited fine

12. ETHICAL CONFLICTS Objectivity/Confidentiality Conflict of Interest
A professional accountant could have 2 or more clients that are in direct competition with each other
An adverse disclosure on one could benefit the other
Safeguards
Chinese wall
Reduced to acceptable level?
No? Decline.

13. ETHICAL CONFLICTS Objectivity/Confidentiality Conflict of Loyalty
“being firm and not changing in your support for a person or an organisation, or in your belief in your principles”
Accountant in business owes a duty of loyalty to his/her employer but also to the profession.

14. ETHICAL CONFLICTS Objectivity/Confidentiality
Loyalty Conflict Problems
employer breaks the law
ethical disagreement

15. ETHICAL CONFLICTS Objectivity/Confidentiality Solutions
Persuade employer to change course
Persuade senior management to change internal practice
Consult third party
Whistle blow
Resign

16. ETHICAL CONFLICTS Objectivity/Confidentiality Whistle-blower Internal
“A person who tells someone in authority about a misconduct, alleged dishonesty or illegal activity in an organisation”
Internal
Tell someone senior
Follow internal policy guideline

17. ETHICAL CONFLICTS Objectivity/Confidentiality External Advice
Financial Reporting Council
Public Interest Disclose Act, 1998 (PIDA)
gives the employee blowing the whistle some protection
Advice
Citizens Advice Bureau
Public Concern at Work

18. ETHICAL CONFLICTS New Clients Consider whether:
you have the competence
you have the resources – staff & time
you are objective
there is a threat to confidentiality

19. ETHICAL CONFLICTS New Clients Consider whether:
you have the competence
you have the resources – staff & time
you are objective
there is a threat to confidentiality

20. ETHICAL CONFLICTS New Clients Customer Due Diligence (CDD)
Accountants must consider whether their services could be used to launder money or aid terrorisms.
Due diligence is the process of evaluating prospective business decision by investigation the other party.

21. ETHICAL CONFLICTS New Clients Customer Due Diligence (CDD)
Accountants must consider whether their services could be used to launder money or aid terrorisms.
Due diligence is the process of evaluating prospective business decision by investigation the other party.

22. ETHICAL CONFLICTS New Clients Customer Due Diligence (CDD)
Verify the client’s identity
Understand any beneficial ownership (> 25%)
Purpose and nature of transaction
Unable to do CDD - decline

23. ETHICAL CONFLICTS New Clients Money Laundering
“to move illegally acquired cash through financial systems so that it appears to be legally acquired”

24. ETHICAL CONFLICTS New Clients Anti Money Laundering Rules
Proceeds of Crime Act 2002 (POCA)
Terrorism Act 2000 (TA)
Money Laundering Regulations 2007
National Crime Agency (NCA)
Fights serious organised crimes – drug trafficking etc.

25. ETHICAL CONFLICTS New Clients Money Laundering (ML)
If a client is suspected of ML, they must be reported to the money laundering reporting officer (MLRO) or submit a Serious Activity Report to the NCA

26. ETHICAL CONFLICTS New Clients Money Laundering (ML) fines
14 years and/or
Unlimited fine