General (110.1 A1 to 110.2 A3)
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110.1 A1

There are five fundamental principles of ethics for professional accountants:

  • Integrity - to be straightforward and honest in all professional and business relationships.

  • Objectivity - not to compromise professional or business judgments because of bias, conflict of interest or undue influence of others.

  • Professional Competence and Due Care - to:

    • Attain and maintain professional knowledge and skill at the level required to ensure that a client or employing organization receives competent professional service, based on current technical and professional standards and relevant legislation; and

    • Act diligently and in accordance with applicable technical and professional standards.

  • Confidentiality - to respect the confidentiality of information acquired as a result of professional and business relationships.

  • Professional Behavior - to comply with relevant laws and regulations and avoid any conduct that the professional accountant knows or should know might discredit the profession.

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R110.2

A professional accountant shall comply with each of the fundamental principles.

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110.2 A1

The fundamental principles of ethics establish the standard of behavior expected of a professional accountant. The conceptual framework establishes the approach which an accountant is required to apply to assist in complying with those fundamental principles. Subsections 111 to 115 set out requirements and application material related to each of the fundamental principles.

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110.2 A2

A professional accountant might face a situation in which complying with one fundamental principle conflicts with complying with one or more other fundamental principles. In such a situation, the accountant might consider consulting, on an anonymous basis if necessary, with:

  • Others within the firm or employing organization.

  • Those charged with governance.

  • A professional body.

  • A regulatory body.

  • Legal counsel.

However, such consultation does not relieve the accountant from the responsibility to exercise professional judgment to resolve the conflict or, if necessary, and unless prohibited by law or regulation, disassociate from the matter creating the conflict.

  • Non-Authoritative Guidance
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110.2 A3

The professional accountant is encouraged to document the substance of the issue, the details of any discussions, the decisions made and the rationale for those decisions.

SUBSECTION 111 Integrity (R111.1 to R111.3)
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R111.1

A professional accountant shall comply with the principle of integrity, which requires an accountant to be straightforward and honest in all professional and business relationships.

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111.1 A1

Integrity implies fair dealing and truthfulness.

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R111.2

A professional accountant shall not knowingly be associated with reports, returns, communications or other information where the accountant believes that the information:

  • Contains a materially false or misleading statement;

  • Contains statements or information provided recklessly; or

  • Omits or obscures required information where such omission or obscurity would be misleading.

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111.2 A1

If a professional accountant provides a modified report in respect of such a report, return, communication or other information, the accountant is not in breach of paragraph R111.2.

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R111.3

When a professional accountant becomes aware of having been associated with information described in paragraph R111.2, the accountant shall take steps to be disassociated from that information.

SUBSECTION 112 Objectivity (R112.1 to R112.2)
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R112.1

A professional accountant shall comply with the principle of objectivity, which requires an accountant not to compromise professional or business judgment because of bias, conflict of interest or undue influence of others.

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R112.2

A professional accountant shall not undertake a professional activity if a circumstance or relationship unduly influences the accountant's professional judgment regarding that activity.

SUBSECTION 113 Professional Competence and Due Care (R113.1 to R113.3)
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R113.1

A professional accountant shall comply with the principle of professional competence and due care, which requires an accountant to:

  • Attain and maintain professional knowledge and skill at the level required to ensure that a client or employing organization receives competent professional service, based on current technical and professional standards and relevant legislation; and

  • Act diligently and in accordance with applicable technical and professional standards.

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113.1 A1

Serving clients and employing organizations with professional competence requires the exercise of sound judgment in applying professional knowledge and skill when undertaking professional activities.

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113.1 A2

Maintaining professional competence requires a continuing awareness and an understanding of relevant technical, professional and business developments. Continuing professional development enables a professional accountant to develop and maintain the capabilities to perform competently within the professional environment.

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113.1 A3

Diligence encompasses the responsibility to act in accordance with the requirements of an assignment, carefully, thoroughly and on a timely basis.

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R113.2

In complying with the principle of professional competence and due care, a professional accountant shall take reasonable steps to ensure that those working in a professional capacity under the accountant's authority have appropriate training and supervision.

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R113.3

Where appropriate, a professional accountant shall make clients, the employing organization, or other users of the accountant's professional services or activities, aware of the limitations inherent in the services or activities.

SUBSECTION 114 Confidentiality (R114.1 to R114.2)
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R114.1

A professional accountant shall comply with the principle of confidentiality, which requires an accountant to respect the confidentiality of information acquired as a result of professional and business relationships. An accountant shall:

  • Be alert to the possibility of inadvertent disclosure, including in a social environment, and particularly to a close business associate or an immediate or a close family member;

  • Maintain confidentiality of information within the firm or employing organization;

  • Maintain confidentiality of information disclosed by a prospective client or employing organization;

  • Not disclose confidential information acquired as a result of professional and business relationships outside the firm or employing organization without proper and specific authority, unless there is a legal or professional duty or right to disclose;

  • Not use confidential information acquired as a result of professional and business relationships for the personal advantage of the accountant or for the advantage of a third party;

  • Not use or disclose any confidential information, either acquired or received as a result of a professional or business relationship, after that relationship has ended; and

  • Take reasonable steps to ensure that personnel under the accountant's control, and individuals from whom advice and assistance are obtained, respect the accountant's duty of confidentiality.

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114.1 A1

Confidentiality serves the public interest because it facilitates the free flow of information from the professional accountant's client or employing organization to the accountant in the knowledge that the information will not be disclosed to a third party. Nevertheless, the following are circumstances where professional accountants are or might be required to disclose confidential information or when such disclosure might be appropriate:

  • Disclosure is required by law, for example:

    • Production of documents or other provision of evidence in the course of legal proceedings; or

    • Disclosure to the appropriate public authorities of infringements of the law that come to light;

  • Disclosure is permitted by law and is authorized by the client or the employing organization; and

  • There is a professional duty or right to disclose, when not prohibited by law:

    • To comply with the quality review of a professional body;

    • To respond to an inquiry or investigation by a professional or regulatory body;

    • To protect the professional interests of a professional accountant in legal proceedings; or

    • To comply with technical and professional standards, including ethics requirements.

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114.1 A2

In deciding whether to disclose confidential information, factors to consider, depending on the circumstances, include:

  • Whether the interests of any parties, including third parties whose interests might be affected, could be harmed if the client or employing organization consents to the disclosure of information by the professional accountant.

  • Whether all the relevant information is known and substantiated, to the extent practicable. Factors affecting the decision to disclose include:

    • Unsubstantiated facts.

    • Incomplete information.

    • Unsubstantiated conclusions.

  • The proposed type of communication, and to whom it is addressed.

  • Whether the parties to whom the communication is addressed are appropriate recipients.

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R114.2

A professional accountant shall continue to comply with the principle of confidentiality even after the end of the relationship between the accountant and a client or employing organization. When changing employment or acquiring a new client, the accountant is entitled to use prior experience but shall not use or disclose any confidential information acquired or received as a result of a professional or business relationship.

SUBSECTION 115 Professional Behavior (R115.1 to 115.2 A1)
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R115.1

A professional accountant shall comply with the principle of professional behavior, which requires an accountant to comply with relevant laws and regulations and avoid any conduct that the accountant knows or should know might discredit the profession. A professional accountant shall not knowingly engage in any business, occupation or activity that impairs or might impair the integrity, objectivity or good reputation of the profession, and as a result would be incompatible with the fundamental principles.

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115.1 A1

Conduct that might discredit the profession includes conduct that a reasonable and informed third party would be likely to conclude adversely affects the good reputation of the profession.

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R115.2

When undertaking marketing or promotional activities, a professional accountant shall not bring the profession into disrepute. A professional accountant shall be honest and truthful and shall not make:

  • Exaggerated claims for the services offered by, or the qualifications or experience of, the accountant; or

  • Disparaging references or unsubstantiated comparisons to the work of others.

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115.2 A1

If a professional accountant is in doubt about whether a form of advertising or marketing is appropriate, the accountant is encouraged to consult with the relevant professional body.