ETIKA PROFESI AKUNTANSI

INTRODUCTION, PRINCIPLE
FUNDAMENTAL, INTEGRITY, AND
OBJECTIVITY

Introduction
A distinguishing mark of the accountancy
profession is its acceptance of the responsibility to
act in the public interest. Therefore, a professional
accountants responsibility is not exclusively to
satisfy the needs of an individual client or
employer. In acting in the public interest, a
professional accountant shall observe and comply
with this Code. If a professional accountant is
prohibited from complying with certain parts of this
Code by law or regulation, the professional
accountant shall comply with all other parts of this
Code.

Fundamental Principle
A professional accountant shall comply with
the following fundamental principles:
(a)Integrity
(b)Objectivity
(c) Professional Competence and Due Care
(d) Confidentiality
(e) Professional Behavior

Fundamental Principle
Conceptual Framework Approach
The circumstances in which professional accountants operate may create
specific threats to compliance with the fundamental principles. It is
impossible to define every situation that creates threats to compliance
with the fundamental principles and specify the appropriate action. In
addition, the nature of engagements and work assignments may differ
and, consequently, different threats may be created, requiring the
application of different safeguards. Therefore, this Code establishes a
conceptual framework that requires a professional accountant to identify,
evaluate, and address threats to compliance with the fundamental
principles. The conceptual framework approach assists professional
accountants in complying with the ethical requirements of this Code and
meeting their responsibility to act in the public interest. It accommodates
many variations in circumstances that create threats to compliance with
the fundamental principles and can deter a professional accountant from
concluding that a situation is permitted if it is not specifically prohibited.

Fundamental Principle
Threats and Safeguards
Threats may be created by a broad range of relationships and
circumstances. When a relationship or circumstance creates a
threat, such a threat could compromise, or could be perceived to
compromise, a professional accountants compliance with the
fundamental principles. A circumstance or relationship may
create more than one threat, and a threat may affect compliance
with more than one fundamental principle. Threats fall into one
or more of the following categories:
a. Self-interest threat
b. Self-review
c. Advocacy threat
d. Familiarity threat
e. Intimidation threat

Fundamental Principle
Safeguards are actions or other measures that may eliminate threats or
reduce them to an acceptable level. They fall into two broad categories:
a. Safeguards created by the profession, legislation or regulation; and
b. Safeguards in the work environment.
Safeguards created by the profession, legislation or regulation include:
. 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 legally empowered third party of the reports,
returns, communications or information produced by a professional
accountant.

Fundamental Principle
When initiating either a formal or informal
conflict resolution process, the following factors,
either individually or together with other factors,
may be relevant to the resolution process:
a. Relevant facts;
b. Ethical issues involved;
c. Fundamental principles related to the matter
in question;
d. Established internal procedures; and
e. Alternative courses of action.

Integrity
Integrityis the quality of being honest and having
strong moral principles, moral uprightness. It is
generally a personal choice to uphold oneself to
consistently moral and ethical standards.
Inethics, integrity is regarded by many people as the
honesty
andtruthfulnessoraccuracyof
one's
actions.
Integrity
can
stand
in
opposition
tohypocrisy, in that judging with the standards of
integrity involves regarding internal consistency as a
virtue, and suggests that parties holding within
themselves apparently conflicting values should
account for the discrepancy or alter their beliefs.

Integrity
The word integrity evolved from the Latin adjectiveinteger,
meaningwholeorcomplete.In this context, integrity is the
inner sense of "wholeness" deriving from qualities such
ashonestyand consistency ofcharacter. As such, one may
judge that others "have integrity" to the extent that they act
according to the values, beliefs and principles they claim to
hold.
Avalue system'sabstraction depthand range of applicable
interaction

may

also

function

as

significant

factors

in

identifying integrity due to their congruence or lack of

congruence with observation. A value system may evolve in a

Integrity
Inethicswhen
discussingbehaviorandmorality,
an
individual is said to possess the virtue of integrity if the
individual's actions are based upon an internally
consistent framework of principles.These principles
should uniformly adhere to sound logicalaxioms or
postulates. One can describe a person as having ethical
integrity to the extent that the individual's actions,
beliefs, methods, measures and principles all derive from
a singlecore group of values. An individual must
therefore be flexible and willing to adjust these values in
order to maintain consistency when these values are
challenged, such as when an expected test result fails to
be congruent with all observed outcomes. Because such
flexibility is a form ofaccountability, it is regarded as
amoral responsibilityas well as avirtue.

Integrity
An individual'svalue systemprovides aframeworkwithin which the
individual acts in ways which are consistent and expected. Integrity
can be seen as the state or condition of having such a framework,
and acting congruently within the given framework.
One essential aspect of a consistent framework is its avoidance of
any unwarranted (arbitrary) exceptions for a particular person or
group especially the person or group that holds the framework. In
law, this principle of universal application requires that even those in
positions of official power be subject to the same laws as pertain to
their fellow citizens. In personal ethics, this principle requires that
one should not act according to any rule that one would not wish to
see universally followed.
The concept of integrity implies awholeness, a comprehensive
corpus of beliefs, often referred to as aworldview.
This concept of wholeness emphasizeshonestyandauthenticity,
requiring that one act at all times in accordance with the individual's

Objectivity
Accounting ethics is primarily a field of applied
ethics and is part of business ethics and human
ethics, the study of moral values and
judgments as they apply to accountancy. It is
an example of professional ethics. Accounting
introduced by Luca Pacioli, and later expanded
by
government
groups,
professional
organizations, and independent companies.
Ethics are taught in accounting courses at
higher education institutions as well as by
companies training accountants and auditors.

Objectivity
Objectivity is a state of mind that excludes bias, prejudice and
compromise and that gives fair and impartial consideration to
all matters that are relevant to the task in hand, disregarding
those that are not. Like integrity, objectivity is a fundamental
ethical principle and requires that the auditors judgment is not
affected by conflicts of interest.
Objectivity and independence are important ethical values in
the accounting profession. Accountants must remain free from
conflicts of interest and other questionable business
relationships when conducting accounting services. Failure to
remain objective and independent may hamper an accountant
ability to provide an honest opinion about a company financial
information. Objectivity and independence are also important
ethical values for auditors.

Objectivity
The need for auditors to be objective arises from
the fact that many of the important issues
involved in the preparation of financial
statements do not relate to questions of fact but
rather to questions of judgment.
A professional accountant in public practice
should consider when providing any professional
service whether there are threats to compliance
with the fundamental principle of objectivity
resulting from having interests in, or relationships
with, a client or directors, officers or employees.

Objectivity
A professional accountant in public practice who
provides an assurance service is required to be
independent of the assurance client. Independence of
mind and in appearance is necessary to enable the
professional accountant in public practice to express a
conclusion, and be seen to express a conclusion, without
bias, conflict of interest or undue influence of others.
The existence of threats to objectivity when providing
any professional service will depend upon the particular
circumstances of the engagement and the nature of the
work that the professional accountant in public practice
is performing.

Objectivity
A professional accountant in public practice should evaluate
the insignificant, safeguards should be considered and
applied as necessary to eliminate them or reduce them to an
acceptable level. Such safeguards may include:

With drawing from the engagement team.

Supervisory procedures.
Terminating the financial or business relationship giving rise
to the threat.
Discussing the issue with higher levels of management
within the firm.
Discussing the issue with those charged with governance of
the client.