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Professional accountants either in public practice or in business are required to comply with the relevant and applicable institutional and governmental laws, rules, and regulations while performing their duties. Professional accountants occupy a fiduciary position in their relationships with employers, clients, and the public. As a result, are expected to act in the best interest of their employers or clients, by ensuring that the right thing is done.
Generally, the investors and other users of the general-purpose financial statements rely heavily on the financial information produced by the management of a Company through its professional accountant, in making informed economic and investing decisions. Therefore, professional accountants should strive to protect the public interest always. Consistent with the dictate of Financial Reporting Council of Nigeria (FRCN) and the International Federation of Accountants (IFAC) regulations, chartered accountants are required to always act ethically and responsibly, by demonstrating good professional behaviour and ensuring high quality of the general-purpose financial statements.
Professional accountants are bound by the rules of professional conduct produced by the IFAC or relevant professional accounting bodies including the Institute of Chartered Accountants of Nigeria (ICAN). All chartered accountants, without exception, are expected to comply with the IFAC conceptual framework and apply the fundamental principles in their day-to-day business activities.
As professional accountants, any action that can damage or bring accounting profession to disrepute should be avoided. Including not engaging in any business, occupation, or activity that impairs or might impair integrity, objectivity, or the good reputation of the profession.
The key fundamental principles of accounting profession include:
Professional accountants have responsibility to demonstrate candor in all their professional and business dealings. As a result, professionals must not only be seen to be truthful but also behave and act honestly. You are a chartered accountant, and hence, must be straightforward in all business relationships.
Integrity involves showing consistent and strict adherence to strong moral and ethical values. It also involves taking responsibility for one’s own actions, decisions, including the consequences that follow. As a chartered accountant, you are expected to behave responsibly and deal honestly with your colleagues, including clients, customers, suppliers, government and with other third parties.
This principle states that professional accountants should not allow bias, conflict of interest or undue influence of others to override professional or business judgments. The financial information produced should be independent, verifiable, and free from biases.
Objectivity in reporting is essential to make financial statements more useful to all users including investors and its contents more reliable. Lack of independence and objectivity can limit or impair the ability of a professional accountant to be decisive in making recommendations about financial information of a company.
Some circumstances can create an ethical dilemma for a professional accountant while performing his or her duties. Hence, adequate safeguards should be put in place to ensure that objectivity and independence is not impaired or eroded.
When providing professional services, professional accountants are expected to act diligently, and consistent with applicable technical, professional standards, best practices, including evolving technologies. Professional knowledge and skill are needed in exercising sound business and professional judgment while serving clients, customers, and other third parties. To ensure clients or customers receive competent professional service, Company or Firm of chartered accountants should provide appropriate training and supervision to its employees and ensure maintenance of requisite professional knowledge and skill.
Professional accountants should enroll for courses, seminars, or workshops periodically to get exposed to the latest trends and best practices, including the Mandatory Continuing Professional Education (MCPE). Confidence is a function of experience. Professional accountants should strive to acquire requisite soft skills that will enhance his or her performance. A professional accountant should be up to date and conversant with evolving technologies, best practices, and applicable legislation.
Consistent with the principle of professional competence and due care, professional accountants are required to only undertake significant jobs or tasks for which he / she can obtain or has the requisite competence and experience to do. Chartered accountants should avoid misleading clients, customers, or the public as to the level of expertise and experience in his / her possession. For this purpose, professional accountants are expected to demonstrate diligence and thoroughness in the performance of a task and exercise professional skepticism always.
This principle requires that professional accountants should respect the confidentiality of information acquired during professional and business relationships and that the information should not be disclosed to any third parties without proper and specific authority to do so. The information acquired is only disclosed when there is express or writing permission or having legal or professional duty or right to disclose.
Confidential information acquired during professional and business relationships should not be used to the benefit of the chartered accountant or any other person. However, professional accountants are only required and entitled to use prior knowledge and experience gained when he / she changes jobs or acquires new clients or customers.
Professional accountants are required to comply with relevant laws, rules, customs, and regulations and should eschew any action or behaviour that impairs, appears to impair, or might erode the reputation of the accounting profession. Chartered accountants should avoid making unsubstantiated claims, disparaging comments, or discrediting the work of other professional colleagues. It is unprofessional to make exaggerated assertion about one’s service offerings, qualifications, or experience gained.
A chartered accountant has a responsibility to shun any action that a reasonable and an informed third party, having knowledge of all relevant information, would conclude negatively about the good reputation of the profession.
Occasionally, professional accountants may find themselves in a compromising situation that create an ethical dilemma while performing their duties. In this circumstance, the strict adherence to the underlying fundamental principles of accounting profession and the application of the relevant safeguards, will have far-reaching effect in protecting your reputation and that of the profession you represent.
Hence, it is essential for Companies or Firms to develop a code of ethics and business conduct and demand total compliance Firmwide, including taken exception to any members, partners, directors, or employees who deal unscrupulously or violate the law to achieve results. Firm should strongly prohibit any distortion and manipulation of books and records and demand total, correct, fair, and timely disclosure of financial information in reporting.
At all times, professional accountants must be above board and demonstrate a high level of professionalism in the conduct of their duties or business relationships. Professional accountants are ambassadors of accounting profession. Hence, we must protect and guard the longstanding reputation of the profession jealously and avoid any action that may damage or erode it.
A chartered accountant is needed in business for a rewarding and profitable outcome. Professional accountant will provide the requisite business and financial strategies to the organization and guide the company against any potential risk exposure. The global business environment is becoming challenging and volatile. Hence, chartered accountants are needed more than ever to help businesses mitigate risks and act as enablers to achieve corporate strategic goals.
To avoid risk of financial losses, you need the service of a professional accountant to help you design tailor-made organizational processes and procedures to preclude financial leakages and develop a policy document known as standards of business conduct to serve as business operating manual.
At Adda, we pride ourselves with highly experienced and committed professionals willing and ready to collaborate with businesses to create value
info@addalli.com
Postal Code: 100213
74 Ogunnusi Road, Ojodu Ikeja, Lagos