Professional ethics encompass the personal, organisational and corporate standards of behaviour expected of professional accountants.
Incorporated Public Accountants exercise specialist knowledge and skill. How the use of this knowledge should be governed when providing a service to the public can be considered a moral issue and is termed professional ethics.
Professionals are capable of making judgements, applying their skills and reaching informed decisions in situations that the general public cannot, because they have not received the relevant training. The most well know example of professional ethics is the Hippocratic oath to which medical doctors.
The Ethical Standards of the International Federation of Accountants/International Ethics Standards Board, and the Ethical Standards for Auditors and the Ethical Standard for Reporting Accountants are the applicable standards in Ireland. Most audits undertaken by Incorporated Public Accountant will be undertaken under the Ethical Standards – Provisions Available for Small Entities (ES-PASE) from the Financial Reporting Council.
The 2014 IESBA Handbook contains the entire Code of Ethics for Professional Accountants (the Code). This edition incorporates several revised pronouncements that were published previously and are now effective—addressing a breach of a requirement of the Code, conflicts of interest, and the definition of “those charged with governance.”
Ethical Standards contain basic principles and essential procedures (identified in bold type lettering) together with related guidance in the form of explanatory and other material.
ES 1 to 5 cover the integrity, objectivity and independence for auditors and apply in the audit of financial statements. Auditors in the UK and Ireland are also subject to the ethical pronouncements established by the auditor’s relevant professional body. These standards also included the ES-PASE mentioned previously.