Mr. Charles Agyekum is a qualified ICAG member who prepares accounts on behalf of a small independent trader. An annual practicing certificate is not required.
This is the first year the member has prepared these accounts. When compiling the most recent accounts, he noticed that some errors were noted in the previous accounts. It appeared that the accounts were based on incomplete records as certain costs were excluded, either intentionally or because records were not maintained.
The client has also requested some additional work to be completed on a complex tax issue. However, the member has no prior experience and does not feel competent to do the work. The client would also like him to provide an audit opinion as they are planning to apply for a bank loan and the bank would like some additional assurance.
Required:
In accordance with IFAC’s code of ethics, explain which ethical principles apply and comment on their relevance to the above scenario. (6 marks)
View Solution
Integrity – this is about being truthful, straightforward and honest, dealing fairly with people and situations; it rules out making misleading or false statements, whether by omission or inclusion of information, either knowingly or without taking care to find out. Mr Charles Agyekum has highlighted his concerns to his client and explained his views with a clear rationale.
Professional competence and due care – this is about acquiring and maintaining appropriate technical and other relevant skills and competence to perform our work, doing it thoroughly and correctly, on a timely basis, and ensuring that users of our output understand its context and limitations. Mr Charles Agyekum has acknowledged his professional ability and has identified a situation where he may not be the most appropriate accountant to complete a specific piece of work.
Professional behaviour – this is about complying with standards and laws, and avoiding actions that might bring the profession into disrepute, such as making unsubstantiated criticisms of a fellow professional, or exaggerating one’s experience. Throughout this scenario, Mr Charles Agyekum has behaved professionally as he has explained his rationale to his client and not completed any work that he was unable to finish to an appropriate standard.
*Identification of 3 ethical issues – 3 marks
*Application of 3 ethical issues to the scenario – 3 marks