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Nbaa ettiquates for accountants

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Nbaa ettiquates for accountants

  1. 1. International Federation of Accountants Etiquettes for Professional AccountantsNBAA Bunju Kassim Hussein, PhD Contact 255 754360174
  2. 2. International Federation of Accountants Organization: Part l Concepts and meaning Relationships – How you want to be perceived Example of etiquettes on IT based interactions and suggestions Iceberg and incorporating UTU/UMUNTU in corporate life Part ll NBAA/IFAC Code of Ethics IFC structure Part A – Framework applies to all professional accountants Part B – Professional accountants in public practice Part C – Professional accountants in business Threats/Risks Part lll Illustrations – in Kiswahili
  3. 3. International Federation of AccountantsThomas Farley, a manners and etiquette expert offering training to businesses across the U.S, spoke on the value of manners noted that the most important aspect to making an impression is the first seven seconds of meeting anyone, stressing the concept of "Remember-ability." "If you're not planning on how you're going to be perceived, how can you be perceived the way you want," Farley asked the audience.
  4. 4. International Federation of AccountantsThen, according to Farley, you have "ten seconds to intrigue." "Don't think of yourself in the terms of the company you work for, position you have, or the school you went to,” "but what would interest the person [you're] talking to. Think of your introductory remarks not as, 'I work here,' but 'I help people who...' Think about how do make the person [you're talking to] shine." He pointed to 7 minutes being the duration of a good networking conversation.
  5. 5. International Federation of Accountants Etiquette, decorum, propriety imply observance of the formal requirements governing behavior in polite society. Decorum suggests dignity and a sense of what is becoming or appropriate for a person of good breeding: a fine sense of decorum. Propriety (usually plural) implies established conventions of morals and good taste: She never fails to observe the proprieties.
  6. 6. International Federation of Accountants
  7. 7. International Federation of Accountants Here are a few suggestions on etiquette when it comes to social media ventures. 1. Keep your personal and business accounts separate. 2. Provide information from other sources. While the point of a social media site for a business is to promote your services, customers appreciate getting tips and suggestions from other sources too. 3. Use proper grammar and spelling.. 4. Pay attention to who you are following. - See more at: etiquette-tips-for-cpas.html#sthash.u8LFrM9Q.dpuf
  8. 8. International Federation of Accountants 1. Be Concise. 2. Don’t Be Unprofessional. 3. Proofread. 4. Don’t Get Disorganized. 5. Add A Signature.
  9. 9. Ethics of Professional Accountants
  10. 10. • Ethics deals with things to be sought and things to be avoided • Morals: rules or duties that govern our behavior, e.g. “do not tell a lie” Ethics and Morals
  11. 11. values • Values: these are beliefs that a given behavior or outcome is desirable or good. • Values serve as standards of conduct that guide our behavior • Example: how we value the environment, self-respect keeping our family safe, good health, (e) politics.
  12. 12. Free Template from 13 13 13 SEA LEVEL 10 % 90 % VISIBLE INVISIBLE ICE BERGE
  13. 13. Free Template from 14 14 14 SEA LEVEL 10 % 90 % VISIBLE INVISIBLE Integrity Honesty Respect Trustworthy Wisdom Patience Perseverance….. UTU…. umutu
  14. 14. Free Template from 15 15 15 SEA LEVEL 10 % 90 % VISIBLE INVISIBLE Integrity Honesty Respect Trustworthy Wisdom Patience Perseverance Courtesy Dependable Fair Transparent Kind Ethical UTU…. umutu
  15. 15. IFC outline Part A – Framework applies to all professional accountants Part B – Professional accountants in public practice Part C – Professional accountants in business
  16. 16. • Integrity – To be straight forward and honest in all professional and business relationships • Objectivity – To not allow bias, conflict of interest or undue influence of others to override professional or business judgments Fundamental Principles
  17. 17. Professional Competence and Due Care  To maintain professional knowledge and skill at the level required to ensure competent professional services based on current developments in practice, legislation and techniques  To act diligently in accordance with applicable technical and professional standards Fundamental Principles
  18. 18. Confidentiality – To refrain from disclosing confidential information acquired as a result of professional and business relationships without proper and specific authority to disclose unless there is a legal or professional right or duty to disclose – To refrain from using confidential information acquired as a result of professional and business relationships for personal advantage or the advantage of third parties Fundamental Principles
  19. 19. Professional behavior –Obligation to comply with relevant laws and regulations and avoid any action that discredits the profession/ role as a director Fundamental Principles in CG also focus on
  20. 20. Objectives of Professional Accountants work to the highest standards of professionalism attain the highest levels of performance, and meet the public’s interest
  21. 21. • Self-interest • Self-review • Advocacy • Familiarity • Intimidation Threats/ Risks
  22. 22. Two categories: • Created by the profession, legislation or regulation • In the work environment Safeguards/Risks
  23. 23. IFAC Code of Ethics – fundamental Principles for all Accountants:  Integrity (Sec 110)  Objectivity (Sec 120)  Professional Competence and Due Care (Sec 130)  Confidentiality (Sec 140)  Professional Behavior (Sec 150) Continuation…
  24. 24. Integrity The principle of integrity imposes an obligation on all professional accountants to be straightforward and honest in performing professional services. It also implies fair dealing and truthfulness. In CG the maxim: ‘Fit for purpose’entails competency Objectivity: The principle of objectivity imposes on all professional accountant not to compromise their professional or business judgment because of bias, conflict of interest or undue influence of others
  25. 25. Professional Competence and Due Care: A professional accountant has a continuing duty to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques.
  26. 26. Confidentiality: A professional accountant should respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such information to third parties without proper and specific authority. Professional Behavior: A professional accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession.
  27. 27. fiduciary responsibilities…. Fiduciary duty means that, as shareholders’ guardians, directors must be trustworthy, acting in the best interest of shareholders, and investors in turn have confidence in the directors’ actions. The corporate governance literature presents the following fiduciary duties of boards of directors: – Duty of due care – Duty of loyalty – Duty of Good Faith – Duty to Promote Success – Duty to Exercise Diligence, Independent Judgment, and Skill – Duty to Avoid Conflict of Interests – Fiduciary Duties and Business Judgment Rules.
  28. 28. Conceptual Framework Approach • A conceptual framework requires a professional accountant to identify, evaluate and address threats to compliance with the fundamental principles, rather than merely comply with a set of specific rules which may be arbitrary. • If threats to ethics are not clearly insignificant, a professional accountant should apply safeguards to eliminate the threats or reduce them to an acceptable level.
  29. 29. When safeguards are never adequate Prohibitions
  30. 30. The rest…. Is stuff from IFAC focused on Auditors … recapped
  31. 31. Threat to Independence Advocacy Threat Familiarity Threat Self Interest Intimidation Threat Self Review Threat Identification of threats to Auditors’ independence
  32. 32. Threats and Safeguards Compliance with the fundamental principles may potentially be threatened by a broad range of circumstances. Many threats fall into the following categories: • Self-interest threats • Self-review threats • Advocacy threats • Familiarity threats • Intimidation threats
  33. 33. Self-Interest Threat A Self-interest threat occurs as a result of the financial or other interests of a professional accountant or of an immediate or close family member; In CG this situation is referred as Conflict of Interest. More over, in CG there is ‘conduct risk assessment’
  34. 34. Self Interest Threats Circumstances • A financial interest in a client or jointly holding a financial interest with a client. • Undue dependence on total fees from a client. • Having a close business relationship with a client. • Concern about the possibility of losing a client. • Potential employment with a client. • Contingent fees relating to an engagement. • A loan to or from a client or any of its directors or officers.
  35. 35. Self-Review Threats Circumstances • The discovery of a significant error during a re-evaluation of the work of the auditor. • Reporting on the operation of financial systems after being involved in their design or implementation. • Having prepared the original data used to generate records that are the subject matter of the engagement. • A member of the team being, or having recently been, a director or officer of that client. • A member of the team being, or having recently been, employed by the client in a position to exert direct and significant influence over the subject matter of the engagement. • Performing a service for a client that directly affects the subject matter of the engagement.
  36. 36. Advocacy Threat An Advocacy Threat occurs when a professional accountant promotes a position or opinion to the point that subsequent objectivity may be compromised. Examples of circumstances that create advocacy threats : Selling, underwriting or otherwise dealing in financial securities or shares of a client; Acting as an advocate on behalf of a client in litigation or disputes with third parties.
  37. 37. • Professional Appointment • Conflicts of Interest • Second Opinions • Fees and Other Types of Remuneration • Marketing Professional Services • Gifts and Hospitality • Custody of Client Assets • Objectivity – All Services • Independence – Audit and Review Engagements • Independence – Other Assurance Engagements Part B – Professional Accountants in Public Practice
  38. 38. • Firm includes network firm, except where otherwise stated • Independence of mind and independence in appearance • Public interest entities: additional provisions in Section 290 that reflect the extent of public interest in certain entities Independence for Audit and Review Engagements
  39. 39. • Documentation: conclusions regarding compliance with independence requirements, and substance of any relevant discussions that support those conclusions Independence for Audit and Review Engagements – cont’d
  40. 40. • Financial interests • Loans and guarantees • Business relationships • Family and personal relationships • Employment with an audit client • Temporary staff assignments Independence for Audit and Review Engagements – cont’d
  41. 41. • Recent service with an audit client • Serving as a director or officer of an audit client • Long association of senior personnel (including partner rotation) with an audit client Independence for Audit and Review Engagements – cont’d
  42. 42. • Provision of non-assurance services to audit clients – Management responsibilities – Preparing accounting records and financial statements – Valuation services – Taxation services – Internal audit services Independence for Audit and Review Engagements – cont’d
  43. 43. • Provision of non-assurance services to audit clients – IT systems services – Litigation support services – Legal services – Recruiting services – Corporate finance services Independence for Audit and Review Engagements – cont’d
  44. 44. • Fees • Compensation and evaluation policies • Actual or threatened litigation • Reports that include a restriction on use or distribution Independence for Audit and Review Engagements – cont’d
  45. 45. • Assurance engagements that are not audit or review engagements • Include related entities when reason to believe relevant to independence • Include network firms when reason to believe relevant to independence Independence for Other Assurance Engagements
  46. 46. • Assertion-based assurance engagements – Independence required from assurance client (party responsible for the subject matter information, and which may be responsible for the subject matter) – When client not responsible for subject matter evaluate the threats firm has reason to believe created by interests and relationships with party responsible for subject matter • Direct reporting engagements – Independence required from assurance client (party responsible for the subject matter) Independence for Other Assurance Engagements
  47. 47. • Multiple responsible parties – Firm may take into account whether interest or relationship with a particular responsible party creates a threat. Consider: • Materiality of subject matter information (or subject matter) for which the particular responsible party is responsible • Degree of public interest associated with engagement Independence for Other Assurance Engagements
  48. 48. • Potential conflicts • Preparation and reporting of information • Acting with sufficient expertise • Financial interests • Inducements Part C – Professional Accountants in Business
  49. 49. Intimidation Threat  Intimidation Threat occur when a professional accountant may be deterred from acting objectively by threats, either actual or perceived.  Examples of circumstances: • Being threatened with dismissal or replacement in relation to a client engagement. • Being threatened with litigation. • Being pressured to reduce inappropriately the extent of work performed in order to reduce fees.
  50. 50. Safeguards Safeguards that may eliminate or reduce such threats to an acceptable level fall into three broad categories: – Safeguards created by the profession, legislation or regulation; – Safeguards within the client; and – Safeguards within the firm ’ s own systems and procedures.
  51. 51. Safeguards created by the profession, legislation or regulation Educational, training and experience requirements for entry into the profession. Continuing professional development requirements. Corporate governance regulations. Professional standards. Professional or regulatory monitoring and disciplinary procedures External review by a third party of the reports, returns, communications or information produced by a professional accountant.
  52. 52. Safeguards within the Client When the client’s management appoints the firm, persons other than management ratify or approve the appointment; The client has competent employees to make managerial decisions; Policies and procedures that emphasize the client ’ s commitment to fair financial reporting; A corporate governance structure, such as an audit committee, that provides appropriate oversight and communications regarding a firm’s services.
  53. 53. Safeguards in the work environment leadership that stresses the importance of independence and the expectation that members of the teams will act in the public interest. Policies and procedures to implement and monitor quality control of the engagements; Documented independence policies regarding the identification of threats to independence, the evaluation of the significance of these threats and the identification and application of safeguards to eliminate or reduce the threats, other than those that are clearly insignificant, to an acceptable level;
  54. 54. Resolution of Ethical Conflicts If the matter remains unresolved, the professional accountant should consult with other appropriate persons within the firm Where a matter involves a conflict with, or within, an organization, consult with those charged with governance of the organization, such as the board of directors or the audit committee. If a significant conflict cannot be resolved, obtain professional advice from the relevant professional body or legal advisors. If, after exhausting all relevant possibilities, the ethical conflict remains unresolved, a professional accountant should, where possible, refuse to remain associated with the matter creating the conflict.
  55. 55. Professional Appointment Client Acceptance - consider whether acceptance would create any threats to compliance with the fundamental principles Engagement Acceptance - agree to provide only those services that the accountant is competent to perform.
  56. 56. Changes in a Professional Appointment Before accepting an appointment involving services that were carried out by another, the proposed auditor should: – Request permission from the client to contact former auditor directly; – Contact existing auditor before beginning audit.
  57. 57. Information from Existing Auditor • Once the client permission is obtained, the existing auditor should provide information honestly and unambiguously. • If the proposed auditor is unable to communicate with the existing auditor, the proposed auditor should try to obtain information about any possible threats by other means such as through inquiries of third parties or background investigations on senior management. • The existing auditor is no longer required to provide information in writing or regarding reasons not to take an audit.
  58. 58. Conflicts of Interest A professional accountant in practice should take reasonable steps to identify circumstances that could pose a conflict of interest. Such circumstances may give rise to threats to compliance with the fundamental principles
  59. 59. Second Opinions • Providing a second opinion on the application of accounting, auditing, reporting or other standards or principles by or on behalf of a company that is not an existing client may cause threats to compliance with the fundamental principles. • Safeguards such as seeking client permission to contact the existing auditor, describing the limitations surrounding any opinion and providing the existing auditor with a copy of the opinion may be required.
  60. 60. Fees and Other Types of Remuneration An auditor may quote whatever fee deemed to be appropriate. However, a self-interest threat to professional competence and due care is created if the fee quoted is so low that it may be difficult to perform the engagement.
  61. 61. Commissions, Referral Fees, and Contingent Fees • A professional accountant in public practice should not pay or receive a referral fee or commission, unless he/she has established safeguards to eliminate the threats or reduce them to an acceptable level. • Contingent fees are widely used for certain types of non-assurance engagements. They may, however, give rise to self-interest threats to compliance with the fundamental principles.
  62. 62. Advertising and Marketing When a professional accountant in public practice solicits new work through advertising or other forms of marketing, there may be potential threats to compliance with the fundamental principles.
  63. 63. What Advertising Cannot Do A professional accountant should not bring the profession into disrepute when marketing professional services. He/she should be honest and truthful and should not: • Make exaggerated claims for services offered, qualifications possessed or experience gained; or • Make disparaging references to unsubstantiated comparisons to the work of another.
  64. 64. Gifts and Hospitality • Self-interest threats to objectivity may be created if a gift from a client is accepted; intimidation threats to objectivity may result from the possibility of such offers being made public. • Gifts or hospitality which are acceptable are those which a reasonable and informed third party, having knowledge of all relevant information, would consider clearly insignificant.
  65. 65. Custody of Client Assets  Safeguard against a self-interest threat to objectivity , a professional accountant in public practice entrusted with money (or other assets) belonging to others should:  Keep such assets separately from personal or firm assets; and  Use such assets only for the purpose for which they are intended.  At all times, be ready to account for those assets, and any income, dividends or gains generated.  Comply with all relevant laws and regulations relevant to the holding of and accounting for such assets.
  66. 66. Application of Framework to Specific Situations The Code of Ethics, discusses a principles-based framework for identifying, evaluating and responding to threats. The framework establishes principles to identify threats to ethics principles, evaluate the significance of those threats, and, if the threats are other than clearly insignificant, identify and apply safeguards to eliminate the threats or reduce them to an acceptable level.
  67. 67. An accountant may perform services in a country other than his home country. If differences exist between ethical requirements of the two countries, the strictest provisions should be applied. Cross-Border Activities
  68. 68. The IFAC Code prohibits the following non-audit services for audit clients: • Bookkeeping Services • Valuation services • Management decision making functions • Broker-dealer or investment advisor services • Litigation support
  69. 69. Financial involvement with a client  direct financial interest in a client;  indirect material financial interest  loans to or from the client or any director or major stockholder in the client company;  financial interest in a joint venture with a client or employee(s) of a client.  financial interest in non-client with investor or investee relationship with the client.
  70. 70. Professional Competence and Responsibilities Regarding the Use of Non-Accountants If a professional accountant does not have the competence to perform a specific part of the professional service, technical advice may be sought from experts (such as other professional accountants, lawyers, actuaries, engineers, geologists, and evaluators). However, since the auditors have ultimate responsibility for the service, it is his responsibility to see that the requirements of ethical behavior are followed.
  71. 71. Activities Incompatible with the Practice of Public Accountancy  A CPA in public practice should not concurrently engage in any business, occupation or activity that impairs or might impair integrity, objectivity or independence, or the good reputation of the profession.  The simultaneous engagement in another activity unrelated to assurance or accounting services, which reduces the accountant’s ability to conduct his accounting practice according to ethical principles, is inconsistent with public practice.
  72. 72. Conflict of Loyalties • Employed professional accountants owe a duty of loyalty to their employer as well as to their profession and there may be times when the two are in conflict. • An employee cannot legitimately be required to break the law, breach the ethics, rules, and standards of the accounting profession, lie to their employer ’ s auditors, or be associated with a statement that materially misrepresents the facts. • If employed accountants cannot resolve any material issue involving a conflict between their employers and their professional requirements they may have no other recourse but to resign.
  73. 73. Support for Professional Colleagues and Professional Competence • Support for Professional Colleagues A professional accountant, particularly one having authority over others, should allow them to develop their own judgment in accounting matters. • Professional Competence An accountant employed in industry, commerce, the public sector or education may be asked to undertake significant tasks for which she has not had sufficient specific training or experience. Where appropriate expert advice and assistance should be sought.
  74. 74. Presentation of Information A professional accountant is expected to present financial information fully, honestly and professionally and so that it will be understood in its context. Under CG, the Directors are equally responsible and have to make attestation on the financial information
  75. 75. Disciplinary action and common sanctions • Disciplinary action ordinarily arises from such issues as: – failure to observe the required standard of professional care, skills or competence; – non-compliance with rules of ethics and discreditable; or dishonorable conduct. • Sanctions commonly imposed by disciplinary bodies include: – reprimand, fine, payment of costs, withdrawal of practicing rights, suspension, and expulsion from membership. – LEGAL OR imposed at the AGM
  76. 76. Discussions, Q & A
  77. 77. Thank you
  78. 78. Hali ilivyo… Utafiti wa Hali ya Uzingatiaji wa Maadili (Integrity Survey, OR-MUU/Mzumbe University 2014): Maeneo yaliyokithiri kwa utovu wa Maadili;-  Matumizi ya Madaraka kwa manufaa binafsi (24%)  Mgongano wa Maslahi (16%)  Matumizi mabaya ya Rasilimali za Umma (14.5%)  Kiwango cha Uzingatiaji wa Maadili katika Utumishi wa Umma kimefikia 66.1% (+9.2%) 9 March 2017 79
  79. 79. 9 March 2017 80 Taarifa ya Miaka Kumi ya Tume ya Utumishi wa Umma (2004-2014) imeonesha kuwa: Waajiri kutozingatia Kanuni na taratibu za Utumishi wa Umma. - Kati ya Mwaka 2004-2013 kulikuwa na Rufaa za Mashauri ya Nidhamu 842 ziliwasilishwa Tume ambapo Rufaa 383 sawa na asilimia 45% ndizo pekee zilizokubaliwa ama moja kwa moja au kwa masharti ya kuanza upya. Hali ilivyo sasa
  80. 80. Hali ilivyo… 9 March 2017 81 - Vitendo visivyo vya kiadilifu miongoni mwa Watumishi wa Umma bado ni kubwa; - Kati ya Mwaka 2008-2013 kulikuwa na Mashauri ya Nidhamu 2,755 ambapo Watumishi 1,142 walifukuzwa kazi kwa makosa ya Utoro(53.6%), Ubadhirifu wa Mali ya Umma (19.7%) na makosa mengineyo 13.3% - Kati ya Kesi 2,322 zilizokuwepo Mahakamani 2004-2013, 59.6% zilihusu ubadhirifu wa Mali ya Umma na 16.4% zilihusu Rushwa.
  81. 81. Hali ilivyo… 9 March 2017 82 - Baadhi ya Waajiri hawazingatii wala kusimamia Haki na Stahili za Watumishi wa Umma na kusababisha Malalamiko miongoni mwa Watumishi - Kati ya Mwaka 2008-2013 jumla ya malalamiko 1,231 yaliyopokelewa na Tume ya Utumishi wa Umma yalihusu Madai ya Mafao/Pensheni, Ajira, kutotendewa haki, kutopandishwa./kutobadilishwa cheo, malimbikizo ya Mishahara, n.k
  82. 82. Hali ilivyo… Vyanzo vingine vinasemaje kuhusu hali ya rushwa:- • Fordia 2010 - TANESCO, Polisi na Uhamiaji. • EABI 201I : Tanzania ya 3 kati ya 5 zilizotathiminiwa Afrika Mashariki ikitanguliwa na Uganda na Burundi • EABI 2012 : Tanzania ya 4 kati ya 5 zilizotathiminiwa Afrika Mashariki ikitanguliwa na Burundi
  83. 83. Hali ilivyo… • REPOA: 65% wanasema rushwa bado ni tatizo kubwa • TI 2014: Tanzania nchi ya 119 kati ya nchi 175 duniani kutoka nchi ya 102 mwaka 2012.