Summary
Summary Code of Professional Conduct
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These notes cover parts 2, 3 and 4A of the SAICA Code of Professional Conduct.
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PART 2: PROFESSIONAL ACCOUNTANTS IN BUSINESS:• Conceptual Framework [part 1] not describe all Part 1: All CA(SA)’s
situations that could be encountered by Prof Acc’s Part 2: Part 3 & 4A & 4B:
CA(SA) in business CA(SA) in public practice
in business
- These situations not described could create $
threats to compliance with fundamental CA(SA)
$ CA(SA)
$
principles
$
• ∴ Conceptual Framework requires Prof Acc’s in
business to be alert for these situations Professional services
PART 2: EXAMPLES OF THREATS & EVALUATION OF THREATS
EXAMPLES OF THREATS:
ADVOCACY SELF-REVIEW INTIMIDATION FAMILIARITY SELF-INTEREST
- Opportunity - Determining - Threat of dismissal or - Responsible for - Financial interests,
to manipulate appropriate replacement over financial reporting loans or guarantees
prospective accounting disagreement about when family - Incentive
info to obtain treatment for B application of an member makes compensation
favourable combination accounting principle or decisions that arrangements
financing after way in which reporting affects entity’s - Inappropriate
performing on financial info is financial reporting personal use of
feasibility study conducted - Long association corporate assets
- Dominant personality with business - Gift or special
attempting to influence contacts treatment offered
decision making influencing from supplier
processes business decisions
EXAMPLES OF EVALUATION OF THREATS:
In work environment
Leadership promoting ethical
behaviour Recruitment procedures for employing
high calibre competent personnel
Policies and procedures for to
communicate ethical issues to Timely communication on policies and
senior management changes
Policies and procedures to
implement and monitor quality Ethics and code of conduct policies
of employee performance
Systems/structures of corporate
oversight; strong internal
controls
Page 1 of 24
,ADDITIONAL SITUATIONS THAT MAY ARISE FOR CA’S IN BUSINESS:
Conflicts of
Interest
Preparation &
Pressure to
Reporting of
Breach
Information
Part 2:
CA’s in
business
Acting with
Inducements
Sufficient
Expertise
Financial
Interests
CONFLICT OF INTEREST
• Prof Acc shall not allow conflict of interest to compromise prof
Potential • Self-Interest
or B judgement
Threats • Self-Review
• Intimidation • Such situation/threats might be created when:
a) Prof Acc undertakes activity for 2 or more parties whose
Fundamental • Objectivity
interests are in conflict
Principles b) Interests of Prof Acc & that of client are in conflict
Factors to Factors to consider:
Evaluate Level • Nature of relevant interests & relationships between parties involved
• Activity & its implication for relevant parties
of Threat
Safeguards to • Withdraw from decision-making process
Address Threat • Restructure or segregate certain responsibilities/duties
• Obtain appropriate oversight
• Disclose nature of conflict
• Obtain consent to undertake activity
Page 2 of 24
, PREPARATION & PRESENTATION OF INFORMATION
Potential • Self-Interest
Threats • Intimidation
Fundamental • Objectivity
Principles • Integrity
• Professional Competence & Due Care
• When preparing or presenting info = Prof Acc shall:
a) Prepare or present info in accordance with relevant reporting framework;
b) Prepare or present info in manner that’s not intended to mislead or influence contractual or
regulatory outcomes inappropriately;
c) Exercise professional judgement to:
- Represent facts accurately & completely in all material respects;
- Clearly describe the true nature of business transactions or activities; &
- Classify & record info in timely & proper manner
d) Not omit anything with intention of making the info misleading or of influencing contractual
or regulatory outcomes inappropriately
Safeguards to • Discuss concerns with superiors, management or those charged with
Address Threat governance
• Consult policies & procedures of employing org on how to address
matters internally [especially whistle-blowing policies]
• Consulting with SAICA [relevant professional body], internal/external auditor of
employing org &/or legal counsel
• Determining whether any requirements exist to communicate to 3rd
parties, including users of info, & regulatory & oversight authorities
• If safeguards cannot be implemented & don’t reduce to acceptable level
= Prof Acc must refuse to be or to remain associated with info
• In some circumstances, it might be appropriate for Prof Acc to resign
from employing org
Page 3 of 24
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