CODE OF ETHICS W G S Hashan Weerasinghe

CODE OF ETHICS W. G. S. Hashan Weerasinghe

Introduction – CIMA Code of Ethics • Set of guild lines set specifically for the CIMA members and the registered students in order to refrain from carrying out any activity that discredit their field of work. • CIMA promotes the highest ethical standards around the word. • CIMA members are bound to inform the Institute of any misconduct or disqualification at work.

Continue…. . • CIMA has adopted following Code of Ethics , - IFAC (International Federation of Accountants. • A member may seek legal advice in case if these don’t qualify to help the ethical problem.

Why are Ethics Important? • A set of Moral Principles • Fairness , honesty and responsibility. Ethics are important because, • Accounts should work properly • How an entity is run • For the discipline of Accountants

CIMA’s Code at a Glance Principles • Code of ethics can help anyone despite of their area of work. • CIMA points out high ended ethical issues that need to be answered. • 5 fundamental principles produce the basic code of ethics.

Five Fundamental Principles (1) OBJECTIVITY (2) PROFESSIONAL COMPETENCE & DUE CARE (3) PROFESSIONAL BEHAVIOR (4) INTEGRITY (5) CONFIDENTIALITY

Objectivity • Resistance to bias, conflict of interest, or influence of others to over ride the professional judgments.

Professional Competence and Due Care • Maintaining and developing the professional knowledge and skills so that the employers and the clients receive a competent service. • Making sure the subordinates are maintaining their competent and committing a full service to the organization

Professional Behavior • Complying with the relevant rules and regulations in the line of your work and laws that you are agreed upon.

Integrity • Being Honest, straight-forward, and truthful in all professional relationships. You should not associate with any information that is false and lead to wrong judgments.

Confidentiality • Securing of the Confidential information receive from the professional relationships in both present and past. • Disclose only under legal permission.

Continue…. • For each and every case these codes may not provide the solutions. • Ethical codes are more effective than set rules, because people tend to break rules but Ethical Codes are not compulsory and it just requires following.

Threats • It is very important to anticipate potential and existing threats to these principles. • The code has identified 5 categories of common threats.

Self Interest Threats • The threats that results in conflict of interest. The possibility of someone choosing the personal objectives and benefits over the company’s principles.

Self review threats • The threats that create when you are required to reevaluate the past decisions , judgments and implementations.

Familiarity Threats • Threats create when you make professional judgments based on sympathetic interests of close relationships. • These relationships are resulted for long term business contacts, accepting gifts, association with colleagues and etc.

Intimidation Threats • This emerge when you have fear of acting objectively. • Because of the fear of dismissal or due an influence from a dominant personality.

Advocacy Threats • The threat created when you are promoting an opinion or position in a way that harms the objectivity. • In General , the employer’s opinions and requirements.

EXAM FOCUS • When you are facing the OT Questions, you will be given a scenario where you are required to identify the threats and assign the ideal principle that is affected.

Safe Guards • The first step to safe guard is to anticipate the significance of the threat. • Then followed by the actions to eliminate or reduce. • Code does not specifically mention the safe guards in detail for each threat. But it gives the guidelines.

Ethical Dilemma • Ethical Dilemma is referred to as a complex situation where you stuck between the moral values and outside influence. For example : Preparing false reports to gain tax advantages under management pressure

Resolving an Ethical Dilemma • First think of the fundamental Principles of CIMA code of ethics that applies company’s internal procedures. • Then weigh up the threats according to the result that will cause. • Examine for the alternatives and put them in to the practice.

Continue • Ethical Dilemma is answered by the ethical safe guards. • Incase of failiure to respond to a threat seek for a third party assistance. Eg : professional consultancy

Process of responding to an Ethical Dilemma 1. Gather information to confirm if it is an ethical problem. 2. Seek internal Assistance eg: Manager 3. If the issue is internally general and fails to get help from inside seek external Assistance eg: External Auditor. 4. Resign from the situation

Examples of ethical issues : • Direct and Indirect demands for bribes and attempts at extortions • Dealing with unfair competition • Honesty in advertising jobs • Management of closures and redundancies • Effects of consuming • Dealing with oppressive governments • Non-exploitation of countries and people