Ethics

Question 1

What is the professional code of ethics?

Answer 1

Professional competence
Integrity
Professional behaviour
Confidentiality
Objectivity

Question 2

What is required before taking on new clients?

Answer 2

Must assess:

• Risk to integrity of the practice on accepting work
• Whether firm has adequate skills and competence
• Risk of money laundering

Information to be obtained:
Company 
- proof of incorporation
- structure, directors and shareholders of the company
- identities of management

Individuals

• proof of identity and address
• details of nature and structure of any unincorporated business interests and any partners in a partnership

Question 3

What is required on accepting work of new clients?

Answer 3

• Must ask permission from client to contact old tax advisors to request information
• If client refuses, should not consider acting for them
• If not, issue a letter of engagement setting out terms and conditions

Question 4

What is examples of conflicts of interest?

Answer 4

• Asked to act for another party in a transaction with an existing client
• Acting for both parties in a divorce
• Acting for the employer and their employees
• Where the advisor may benefit from the transaction

Question 5

When can an ACCA member act for conflicting interest

Answer 5

Safeguarding measures put in place:

• potential conflict should be pointed out to all relevant parties
• consent should be obtained to act for them
• firm must have clear guidelines in respect to confidentiality
• should consider the need to use separate teams for each client

Question 6

What is the accountants responsibility with HMRC?

Answer 6

• Information must be accurate and complete
• Must not assist a client to plan or commit an offence

If become aware of a tax irregularity:

• Discuss with client
• Ensure proper disclosure to HMRC

Question 7

What is the process when client makes an error (HMRC)?

Answer 7

• Decide whether genuine or deliberate act
• Explain to client the need to notify HMRC
• If client refuses, must explain the consequences in writing
• If material, consider whether to act for client
• If client still refuses should cease to act and write to HMRC stating that the firm no longer acts for the client but not stating the reason why