Professional and Ethical Responsibilities

• Lesson 1 focuses on The Professional and Ethical Responsibilities.

Ethics Overview

• Personal ethics is a personal value system applied by an individual to decision-making, conduct and interaction between self and others.
• Business ethics are the ethical principles and values applied by organizations to decision-making, conduct and relationships between the organization, its stakeholders, and society.
• Professional ethics are fundamental ethical principles and values applied by a professional CA/RA to decision-making, conduct and relationships between the professional, its stakeholders, and society.

SAICA By-Laws

• Section 4 of Appendix 4 of the SAICA By-Laws contains a non-exhaustive list of punishable conduct
• This includes conduct which is discreditable, dishonorable, dishonest, irregular, or unworthy, or derogatory to the Institute, which tends to bring disrepute to accountancy.
• Examples of offenses include contravening the Designation Act, improperly obtaining work, or failing to account for money or property.
• Misconduct includes gross negligence, failing to ensure the correctness of accounts or reports, and refusing to conforms with by-laws.
• Punishable conduct applies to Trainee Accountants.

Markus Jooste Case

• Charges of misconduct have been proffered to Markus Jooste, a SAICA member.
• Jooste is charged with conducting himself in a manner that is discreditable, dishonorable, dishonest, irregular or unworthy, or which is derogatory to the Institute.
• Jooste is charged with the failure to maintain and adhere to the fundamental principles in the SAICA Professional Code of Conduct for Chartered Accountants.
• In June 2019, SAICA's Board resolved not to accept Mr. Markus Jooste's resignation from SAICA membership, but resolved to suspend his membership pending the finalization of disciplinary proceeding against him.

IRBA's Rules of Improper Conduct

• Section 2 of IRBA Rules Regarding Improper Conduct (2019) is a non-exhaustive list of punishable conduct.
• Improper conduct applies to a registered auditor or a registered candidate auditor without reasonable cause or excuse.
• Examples are contravening any provision of law, dishonesty, failing to perform duties with professional competence, and failing to resign when asked by the client.

SAICA CPC

General Information

• SAICA CPC sets out the fundamental principles of ethics for professional accountants.
• It reflects the profession's recognition of its public interest responsibility.
• It creates a standard of behavior expected of a professional accountant.
• The CPC provides a conceptual framework that professional accountants apply to identify, evaluate and address threats.
• For assurance engagements, the CPC provides Independence standards,
• It provides detail about complying with the Code, which included Fundamental Principles and a Conceptual Framework.
• Details are included for Professional Accountants in Business and in Public Practice.

Conceptual Framework

• Applying the conceptual framework requires an inquiring mind and the exercise of professional judgment using the reasonable and informed third party test.
• Step 1 is to Identify threats to fundamental principles and independence.
• Threats are evaluated by considering factors like evaluating the level of threats and new information.
• Step 3, is to address threats, when a threat cannot be kept to an acceptable level, steps are to eliminate the threat or reduce to an acceptable level.
• To have an enquiring mind, a prerequisite to obtaining and understanding is to properly apply the conceptual framework.
• This includes considering the source, relevance, and sufficiency of information.
• Being alert to bias, a lack of neutrality that affects judgement or skepticism, is key.

Professional Judgement and Skepticism

• Professional Judgement is applying training, knowledge and experience, within the assurance, auditing, accounting and ethical standards context while making decisions about appropriate actions,
• Professional Skepticism is being alert to conditions which may indicate possible misstatement due to error or fraud, and making critical assessments of evidence.

Ethical Principles

• To exhibit Integrity is to be straightforward and honest in all professional and business relationships. This means acting appropriately even when facing pressure to do otherwise.
• Objectivity means exercising professional or business judgement without undue influence of bias, conflict of interest or individuals.
• Professional Competence and Due Care mean having sufficient knowledge and skill. It includes acting diligently and in accordance with applicable standards.
• Confidentiality is respecting acquired information, and not disclosing or using it improperly.
• Professional Behavior requires complying with laws and regulations and avoiding discrediting the profession.

Independence

• Independence comprises of independence of mind and appearance in public practice providing assurance services.
• Independence of the mind is the state of mind that permits the expression of a conclusion without being impacted by influences that compromise professional judgement - to act with integrity and exercise professional skepticism.
• Independence in appearance are facts and circumstances so significant that a reasonable and informed third party would likely to conclude a team member’s integrity, objectivity or skepticism had been compromised

Threats

• Self-interest threat is when a financial or other interest influences a professional accountant's judgement or behavior.
• Self-review threat when a professional accountant won’t appropriately evaluate results of a previous judgement.
• Advocacy threat is if a professional accountant will promote a client's position to the point that accountant's objectivity is compromised.
• Familiarity threat means a professional accountant becomes too long or close to a client and might sympathize with their interests
• Intimidation threat deter someone acting objectively because of pressures from influence exercised over them.

Explore personal, business, and professional ethics, focusing on their importance in decision-making and relationships. Understand SAICA By-Laws, specifically Section 4 of Appendix 4, which lists punishable conduct and ethical violations.