Section 110: The Fundamental Principles

Section 110: The Fundamental Principles · Complied AI

(e)

Professional Behaviour – to:

(i)

Comply with relevant laws and regulations;

(ii)

Behave in a manner consistent with the profession’s responsibility to act in the public interest in all professional activities and business relationships; and

(iii)

Avoid any conduct that the chartered accountant knows or should know might discredit the profession.

R110.2

A chartered accountant shall comply with each of the

fundamental principles. 110.2 A1 The fundamental principles of ethics establish the standard of behaviour expected of a chartered accountant. The conceptual framework establishes the approach which an accountant is required to apply in complying with those fundamental principles. Subsections 111 to 115 set out requirements and application material related to each of the fundamental principles. 110.2 A2 A chartered 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, with: • Others within the firm or employing organization. • Those charged with governance. • Institute • 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. 110.2 A3 The chartered 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

A chartered accountant shall comply with the principle of

integrity, which requires an accountant to be straightforward and honest in all professional and business relationships. 111.1.1 A1 A chartered accountant shall comply with the principle of honesty, which requires an accountant to be honest and upright as a citizen, and in the personal affairs. 111.1.1 A2 A chartered accountant shall imbibe the ideal of Satyameva Jayate (Sanskrit: सत्यमेव जयते ) which means 'Truth alone triumphs', being part of the Mundaka Upanishad , and adopted as national motto of India. 111.1 A1 Integrity involves fair dealing, truthfulness, and having the strength of character to act appropriately, even when facing pressure to do otherwise or when doing so might create potential adverse personal or organizational consequences. 111.1 A2 Acting appropriately involves:

(b)

Act diligently and in accordance with applicable technical and professional standards. 113.1 A1 Serving clients and employing organizations with professional competence involves the exercise of sound judgment in applying professional knowledge and skills. 113.1 A2 The knowledge and skills necessary for a professional activity vary depending on the nature of the activity being undertaken.

For example, in addition to the application of any technical

knowledge relevant to the professional activity, interpersonal, communication and organizational skills facilitate the chartered accountant’s interaction with entities and individuals with whom the accountant interacts. 113.1 A3 Maintaining professional competence requires a chartered accountant to have a continuing awareness and understanding of technical, professional, business and technology-related developments relevant to the professional activities undertaken by the accountant.

Continuing

professional development enables an accountant to develop and maintain the capabilities to perform competently within the professional environment. 113.1 A4 Diligence encompasses the responsibility to act in accordance with the requirements of an assignment, carefully, thoroughly and on a timely basis.

R113.2

In complying with the principle of professional competence

and due care, a chartered accountant shall take reasonable steps to ensure that those working in a professional capacity under the accountant’s authority have appropriate training and supervision.

R113.3

Where appropriate, a chartered accountant shall make clients, the employing organization, or other users of the accountant’s professional activities, aware of the limitations inherent in the activities and explain the implications of those limitations.

SUBSECTION 114 – CONFIDENTIALITY

R114.1

A chartered accountant shall comply with the principle of

confidentiality, which requires an accountant to respect the confidentiality of information acquired in the course of professional and employment relationships. An accountant shall:

(b)

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

(i)

To comply with the requirements of peer review or quality review or such other review by the Institute;

(ii)

To respond to an inquiry or investigation by the Institute or other regulator;

(iii)

To protect the professional interests of a chartered accountant in legal proceedings; or meet the ends of justice in legal proceedings when demanded by the court; 114.3 A2 In deciding whether to disclose or use 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 authorizes the disclosure or use of information by the chartered accountant. • Whether all the relevant information is known and substantiated, to the extent practicable. Factors affecting the decision to disclose or use, the information include: o Unsubstantiated facts. o Incomplete information. o Unsubstantiated conclusions. • The proposed means of communicating the information. • Whether the parties to whom the information is to be provided or access is to be granted are appropriate recipients. • Any applicable law or regulation (including those governing privacy) in a jurisdiction where disclosure might take place and, if different, the jurisdiction where the confidential information originates. 114.3 A3 The circumstances in which a firm or employing organization seeks authorization to use or disclose confidential information, include where the information is to be used for training purposes, in the development of products or technology, in research or as source material for industry or other benchmarking data or studies. Such authorization might be general in its application (for example, in relation to use of the information for internal training purposes or quality enhancement initiatives). When obtaining the authorization of the individual or entity that provided such information for use in specific circumstances, relevant considerations to be communicated (preferably in writing) might include: • The nature of the information to be used or disclosed. • The purpose for which the information is to be used or disclosed (for example, technology development, research or benchmarking data or studies). • The individual or entity who will undertake the activity for which the information is to be used or disclosed. • Whether the identity of the individual or entity that provided such information or any individuals or entities to which such information relates will be identifiable from the output of the activity for which the information is to be used or disclosed.

R114.4

A chartered 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 in the course of a professional or employment relationship.

SUBSECTION 115 – PROFESSIONAL BEHAVIOUR

R115.1

A chartered accountant shall comply with the principle of

professional behaviour, which requires an accountant to: