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Accounting and Society by Duyen-Tho Nguyen (Accountant as Member of…
Accounting and Society
by Duyen-Tho Nguyen
Accountant as Member of Profession
5. What is a professional?
Has a significant level of training, high level of competence and skills
Behave ethically and appropriately; apply skills and judgement in areas of importance
4. What is a profession?
An occupational area with prolonged training and a formal qualification
Members must behave ethically for public interest
Self regulation vs. co-regulatory process
6. The accounting profession
Traditional view
focus on society
Market view
self interest
3. Ideals of accounting
Entrepreneuship:
focus on personal wealth and influence
Professionalism:
serve public interest
7. Trust and professions
public trust is vital to any profession; if not, causing a severe for public, profession and its members
2. Enlightened self-interest
possible to be committed to public interest and possess a degree of self-interest
8. Attributes of a profession
code of ethics for its members
distinctive ethos or culture
high degree of autonomy and independence
application of professional judgment
ideal of service to the community
existence of a governing body
extensive education process for its members
systematic body of theory and knowledge
9. The profession’s regulatory process
The quality assurance process
Standard setting:
FRC with oversight responsibility
Conformity with Standards:
APES 205 Conformity with Accounting Standards
APES 210 Conformity with Auditing and Assurance Standards
-> mandatory for those involve in preparation, presentation or audit of financial reports
Practice review:
every 5 years, reviewers from CPAA, visit accounting firm.
Accounting firm regulations:
APES 320 Quality controls for Firms
leadership; ethical requirement; human resource; acceptance/ continuance of client
Professional discipline
Disciplinary results
Types of complains
AUASB:
set auditing standards -> FRC
AASB:
set accounting standards -> FRC
APESB:
independent ethical standard board to review and set professional standard
1. Public interest or self interest
Serve the public interest with objective, accurate, unbiased, expert and appropriate financial and accounting advice.
Reponsible decision making:
making decision within systematic framework of principles (
Governance
,
accountability
,
ethic
).
Interaction with society
10. Accounting roles, activities and relationships
Key professional relationship:
employers;
employees;
peers;
regulator;
clients.
Work environment
Public practice
Public sector
Not for profit
Private sector
11. Social impact of accounting
e.g. depreciation
Impacts of higher level of depreciation
Impacts of lower level of depreciation
12. Credibility of the profession
What cause a reduce in credibility?
Creative accounting
Poor audit quality
Lack of audit independence
Financial Accounting Distortions:
ineffective accounting standards for complex financial instruments
Restoring credibility
Establishment of the FRC; reduce profession's autonomy
Accounting standards are backed by law
Auditors must apply the code of ethics APES 110
Enhanced regulation, e.g. SOX, COSO
Adoption of international standards
13. Capability considerations
TSKE
SSKE