Confidentiality

Following are excerpts from the IFAC Code regarding "Confidentiality"

Confidentiality 

140.1 The principle of confidentiality imposes an obligation on  all  professional accountants to refrain from: 

(a) Disclosing outside the firm or employing organization confidential information acquired as a result of professional and business relationships without proper and specific authority or unless there is a legal or professional right or duty to disclose; and 

(b) Using confidential information acquired as a result of professional and business relationships to their personal advantage or the advantage of third parties. 

140.2 A professional accountant shall maintain confidentiality, including in a social environment, being alert to the possibility of inadvertent disclosure, particularly to a close business associate or a close or immediate family member. 

140.3 A professional accountant  shall  maintain confidentiality  of information disclosed by a prospective client or employer. 

140.4 A professional accountant  shall  maintain confidentiality of information within the firm or employing organization. 

140.5 A professional accountant shall  take reasonable steps to ensure that staff under the professional accountant’s control and persons from whom advice and assistance is obtained respect the professional accountant’s duty of confidentiality. 

140.6 The need to comply with the principle of confidentiality continues even after the
end of relationships between a professional accountant and a client or employer.
When a professional accountant changes employment or acquires a new client,
the professional accountant is entitled to use prior experience. The professional
accountant  shall  not, however, use or disclose any confidential information
either acquired or received as a result of a professional or business relationship. 

140.7 The following are circumstances where professional accountants are or may be required to disclose confidential information or when such disclosure may be appropriate: 

(a) Disclosure is permitted by law and is authorized by the client or the employer; 

(b) Disclosure is required by law, for example: 

(i) Production of documents or other provision of evidence in the course of legal proceedings; or 

(ii) Disclosure to the appropriate public authorities of infringements
of the law that come to light; and 

(c) There is a professional duty or right to disclose, when not prohibited
by law: 

(i) To comply with the quality review of a member body or professional body; 

(ii) To respond to an inquiry or investigation by a member body or regulatory body; 

(iii) To protect the professional interests of a professional accountant in legal proceedings; or 

(iv) To comply with technical standards and ethics requirements. 

140.8 In deciding whether to disclose confidential information, relevant factors to consider include: 

• Whether the interests of all parties, including third parties whose interests may be affected, could be harmed if the client or employer consents to the disclosure of information by the professional accountant. 

• Whether all the relevant information is known and substantiated, to the extent it is practicable; when the situation involves unsubstantiated facts, incomplete information or unsubstantiated conclusions, professional judgment shall be used in determining the type of disclosure to be made, if any. 

• 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.

Source : http://www.ifac.org/publications-resources/2012-handbook-code-ethics-professional-accountants

Professional Competence and Due Care

Following are excerpt from the IFAC Code regarding "Professional Competence and Due Care"

Professional Competence and Due Care 

130.1 The principle of professional competence and due care imposes the following obligations on all professional accountants: 

(a) To maintain professional knowledge and skill at the level required to ensure that clients or employers receive competent professional service; and

(b) To act diligently in accordance with applicable technical and professional standards when providing professional services. 

130.2 Competent professional service requires the exercise of sound judgment in applying professional knowledge and skill in the performance of such service. Professional competence may be divided into two separate phases: 

(a) Attainment of professional competence; and 

(b) Maintenance of professional competence. 

130.3 The maintenance of professional competence requires a continuing awareness and an understanding of relevant technical, professional and business developments. Continuing professional development enables a professional accountant to develop and maintain the capabilities to perform competently within the professional environment. 

130.4 Diligence encompasses the responsibility to act in accordance with the requirements of an assignment, carefully, thoroughly and on a timely basis. 

130.5 A professional accountant shall take reasonable steps to ensure that those working under the professional accountant’s authority in a professional capacity have appropriate training and supervision. 

130.6 Where appropriate, a professional accountant shall make clients, employers or other users of the  accountant’s  professional services aware of  the limitations inherent in the services.

Source : http://www.ifac.org/publications-resources/2012-handbook-code-ethics-professional-accountants

Objectivity

Following are excerpt from the IFAC Code regarding "Objectivity"

Objectivity 

120.1 The principle of objectivity imposes an obligation on all professional accountants not to compromise their professional or business judgment because of bias, conflict of interest or the undue influence of others. 

120.2 A professional accountant may be exposed to situations that may impair objectivity. It is impracticable to define and prescribe all such situations. A professional accountant shall  not perform a professional service if a circumstance  or  relationship biases or unduly influences the  accountant’s professional judgment with respect to that service.

Source : http://www.ifac.org/publications-resources/2012-handbook-code-ethics-professional-accountants

Integrity

Following are excerpt from the IFAC Code regarding "Integrity"

Integrity  

110.1 The principle of integrity imposes an obligation on all professional accountants to be straightforward and honest in all professional and business relationships. Integrity also implies fair dealing and truthfulness.  

110.2 A professional accountant  shall  not  knowingly  be associated with reports, returns, communications or other information where the professional accountant believes that the information: 

(a) Contains a materially false or misleading statement; 

(b) Contains statements or information furnished recklessly; or 

(c) Omits or obscures information required to be included where such omission or obscurity would be misleading. When  a professional accountant becomes aware that the accountant has been associated with such information, the accountant shall take steps to be disassociated from that information. 

110.3 A professional accountant will be deemed not to be in breach of paragraph  

110.2 if the professional accountant provides a modified report in respect of a matter contained in paragraph 110.2.

Source : http://www.ifac.org/publications-resources/2012-handbook-code-ethics-professional-accountants

Professional Behavior

Following are excerpt from the IFAC Code regarding "Professional Behavior"

Professional Behavior 

150.1 The principle of professional behavior imposes an obligation on  all professional accountants to comply with relevant laws and regulations and avoid any action that  the professional accountant  knows  or should know may discredit the profession. This includes actions that a reasonable and informed third party,  weighing all the specific facts and circumstances available  to the professional accountant at that  time, would  be likely to conclude adversely affects the good reputation of the profession. 

150.2 In marketing and promoting themselves and their work, professional accountants  shall  not bring the profession into disrepute. Professional accountants shall be honest and truthful and not: 

(a) Make exaggerated claims for the services they are able to offer, the qualifications they possess, or experience they have gained; or 

(b) Make disparaging references or unsubstantiated comparisons to the work of others.

Source :  http://www.ifac.org/publications-resources/2012-handbook-code-ethics-professional-accountants

Basic Professional Values and Ethics

Accounting is not just a course but a profession.

Characteristics distinguishing a profession:

• Mastery of a particular intellectual skill, acquired by training and education;
• Adherence by its members to a common code of values and conduct established by its administering body, including maintaining an outlook which is essentially objective; and
• Acceptance of a duty to society as a whole.

To ensure the highest quality of performance and to maintain public confidence in the profession, PICPA has adopted the IFAC Code of Ethics(with certain modifications).

The code mentions the accountants' responsibility to the public, as follows:

• Independent auditors should help maintain the integrity and efficiency of financial statements.

• Financial executives contribute to the efficient and effective use of the organization’s resources.

• Internal auditors provide assurance about sound internal control system which enhances the reliability of the external financial information of the employer.

• Tax experts help to establish confidence and efficiency, and the fair application of the tax system.

• Management consultants have a responsibility toward the public interest in advocating sound management decision-making.

According to the code, a professional accountant  shall comply with the following fundamental
principles:

(a) Integrity – to  be straightforward and honest in all professional and business relationships.

(b) Objectivity – to not allow bias, conflict of interest or undue influence of others to override professional or business judgments.

(c) Professional Competence and Due Care – to  maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional services based on current developments in practice, legislation and techniques  and  act diligently and in accordance with applicable technical and professional standards.

(d) Confidentiality – to respect the confidentiality of information acquired as a result of professional and business relationships and, therefore,  not disclose any such information to third parties without proper and specific authority, unless there is a legal or professional right or duty to disclose, nor use the information for the personal advantage of the professional accountant or third parties.

(e) Professional Behavior – to comply with relevant laws and regulations and avoid any action that discredits the profession.

Note: Click the links for detailed discussion.

References :
IFAC Code
PICPA New Code of Ethics for CPAs