Ethics

Question 1

Name 8 Safeguards

Answer 1

1. Notifying the client of the firm’s business interest or activities that may represent a conflict of interest
2. Notifying all known relevant parties that the professional accountant is acting for two or more parties in respect of a matter where their respetive interests are in conflict
3. Notifying the client that the professional accountant does not act exclusively for any one client in the provision of proposed services (for example, in a particular market sector or with respect to a specific service)
4. The use of separate engagement teams
5. Procedures to prevent access to information (eg physical separation of teams, confidential and secure data filing)
6. Clear guidelines for m embers of the engagement team on issues of security and confidentiality
7. Regular review of the application of safeguards by a senior individual not involved with relevant client engagements
8. use of agreements signed by employees and partners to ensure actual and perceived confidentiality

Question 2

When to disclose (3)

Answer 2

• Dislosures is permitted by law and authorised by the client or employer
• Disclosure is required by law (eg anti money laundering legislation)
• Professional right or duty to disclosre when not prohibited by law (eg to comply with a review by a professional body or to protect the professional interests of an accountant in legal proceedings)

Question 3

Factors to consider regarding disclosure

Answer 3

Whether the interests of all parties could be harmed if client consents to disclosure

Whether all relevant information is known and substantiated

The type of communication that is expected and to whom it is addressed

Whether the parties to whom the communication is addressed are appropriate recipients

Whether the information is privileged

The legal and regulatory obligations and the possible implications of disclosure

Question 4

Standards for tax planning (professional conduct in relation to taxation)

Answer 4

Client specific

• must be specific to the particular needs of the client
• clients must be alerted to the wider risks

Disclosure and transparency

• not contrary to the clear intentions of parliament
• not highly artificial / contrived and seek to exploit shortcomings within the legislation

Lawful

• based on a realistic assessment of the facts and on a credible view of the law
• the requirement to advise clients on the material uncertainty in the law (including where HMRC could take a different view) applies even when the practical likelihood of HMRC intervention is considered low.

Members should consider taking further advice appropriate to the risks and circumstances of the particular case, for example where litigation is likely.

Question 5

Conflict resolution process

Answer 5

1. relevant facts
2. relevant parties
3. ethical issues involved
4. fundamental principles related to the matter in question
5. established internal procedures
6. alternative courses of action

Steps

1. consult with other appropriate persons
2. ICAEW confidential ethics he[line
3. Document issues and details of discussions
4. If still unresolved refuse to remain associated
5. withdraw from the engagement team or resignation

Question 6

Professional indemnity insurance

Answer 6

If the gross fee income is < £600,000 2.5 x gross fee income with a minimum of £100,000

Otherwise minimum is £1.5m