ethics

Question 1

ethics

what are ethics?

Answer 1

moral principles that affect how people make decisions

Question 2

ethics

what can a business do to encourage staff to behave ethically?

Answer 2

• managers ‘lead by example’
• strong code of conduct
• regular training

Question 3

ethics

what is integrity?

Answer 3

the accountant should be honest and truthful

Question 4

ethics

what is objectivity?

Answer 4

don’t allow bias to affect professional judgement and behaviour

Question 5

ethics

what is professional competence and due care?

Answer 5

maintaining professional knowledge and skill level, through training

Question 6

ethics

what is confidentiality?

Answer 6

do not disclose confidential information for a personal gain to themselves, or anyone else

Question 7

ethics

what is professional behaviour?

Answer 7

comply with relevant laws, and accounting regulations

Question 8

ethics

what is a self-interest threat?

Answer 8

accountant benefitting personally, from their actions

Question 9

ethics

what is a self-review threat?

Answer 9

accountants may disregard checking their own accuracy, and believe it is of a high standard

Question 10

ethics

what is a familiarity threat?

Answer 10

accountant is influenced by senior managers

Question 11

ethics

what is an intimidation threat?

Answer 11

accountant is threatened by senior managers

Question 12

ethics

what is an advocacy threat?

Answer 12

accountant/auditor taking a strong position, in favour of support of the client

Question 13

ethics

what safeguards can be put in place against ethical threats?

Answer 13

• education and training about ethics
• codes of ethics published by accounting bodies
• professional standards of behaviour

Question 14

ethics

what consequences may arise if ethics are breached?

Answer 14

• disciplinary action by employer or professional accounting body
• penalties, such as fines and/or suspension

Question 15

ethics

what are accounting standards?

Answer 15

published documents that provide rules and guidance to follow double-entry, when statements are being prepared

Question 16

ethics

why are accounting standards useful?

Answer 16

• avoids confusion and misunderstanding
• ensures accountants are consistent, in the way they treat transactions
• allows comparisons

Question 17

ethics

what is the companies act 2006?

Answer 17

financial statements must be prepared in accordance with appropriate accounting standards

Question 18

ethics

what are some of the components of companies act 2006?

Answer 18

• submissions can be made electronically
• directors duties are listed
• requirements relating to preparation of financial statements

Question 19

ethics

what is the conceptual framework for financial reporting?

Answer 19

helps the FASB, when developing and revising accounting standards

Question 20

ethics

what guidance does the conceptual framework give to the FASB?

Answer 20

• goals and purposes of financial reporting
• how transactions should be accounted for
• recognition, measurement, reporting, and summarisation of transactions

Question 21

ethics

what does FASB stand for?

Answer 21

financial accounting standards board

Question 22

ethics

what are characteristics of useful financial information?

Answer 22

• comparable
• verifiable
• timely
• understandable

Question 23

ethics

what does CCAB stand for?

Answer 23

consultative committee of accountancy bodies

Question 24

ethics

what does CCAB do?

Answer 24

• includes ICAEW
• focuses on providing auditing services

Question 25

**ethics** what does CIMA stand for?

Answer 25

charted institute of management accountants

Question 26

**ethics** what does CIMA do?

Answer 26

focuses on management accounting, rather than auditing

Question 27

**ethics** what is corporate governance?

Answer 27

the systems by which companies are directed and controlled

Question 28

**ethics** what is an audit?

Answer 28

checking true and fair views of financial statements

Question 29

**ethics** TRUE OR FALSE: auditing is completed internally

Answer 29

FALSE (external firms must carry out auditing, to provide an unbiased view)

Question 30

**ethics** what does an ‘unqualified’ opinion, in auditing, suggest?

Answer 30

auditors are satisfied that financial statements have been prepared properly

Question 31

**ethics** what does a ‘qualified’ opinion, in auditing, suggest?

Answer 31

auditors believe that there is significant items in the financial statements that have not been reported correctly

Question 32

**ethics** what is the auditing committee?

Answer 32

the companies board of directors

Question 33

**ethics** what does FRC stand for?

Answer 33

financial reporting council

Question 34

**ethics** what is the FRC?

Answer 34

- the independent, statutory regulator of audit and accounting in the UK - sets the UK’s corporate governance code

Question 35

**ethics** what does the department of business, innovations, and skills do?

Answer 35

supports businesses to invest, grow, and expand