Professional Practice in Accounting for Corporate Governance

Question: Discuss about theProfessional Practice in Accounting for Corporate Governance. Answer: Introduction For every human being, ethics plays an important role in shaping his personality. In general, it refers to the moral principles which govern the behavior of an individual. In the context of business, it is defined as the study of business practices and policies which are related to the controversial issues (Ferrell Ferrell, 2012). These issues may be in the form of discrimination, corporate social responsibility, corporate governance, bribery or fiduciary responsibilities. It ensures that there is a certain amount of trust present in the participants of the business market which helps them to carry out the business transactions. In the companies, it is present in the form of a set of principles which help the managers in forming the policies, programs for the business and provides a base for the decision-making process. It is important for a business to ensure ethical practices in its activities as it has the capability to affect the productivity, reputation and the bottom line of any organization (Mika, 2012). Ethics in the organization helps in building a positive corporate culture which helps in boosting the morale of the employees, which eventually results in better productivity. In this regard, this report aims at discussing the role of ethics and code of conduct in the working of an accounting professional. An interview has been conducted with a finance manager working in a hospitality organization base in Australia. The manager is an accounting professional, a CA qualified professional, who is responsible for partnering with the senior management of the company on a regular basis and indulge in the decision-making process. In addition to this, this report also undertakes a review of a professional body Chartered Accountants Australia and New Zealand (CA ANZ), wherein the charter, current code of conduct, ramifications of breach of conduct and the education provided by the professional body are discussed. It also makes a comparison between the interviewee and the professional body in terms of similarities and dissimilarities that are faced concerning the code of conduct. Roles and Responsibilities of the Interviewee The role and responsibilities of the finance manager are listed below: Creating budgets and forecasting for the company Responsible for monthly accounting responsibilities including cash flows, profit, and loss, reports Business analysis and providing guidance for improvements in companys financials Assist the senior management in strategy setting Ensuring best accounting and analytical practices are enforced in the company Audit control and process improvement Liaising with the internal and external stakeholders Analysis of the Interview Questions An interview was conducted with the finance manager of a hospitality company based in Australia to determine the relevance of code of conduct on the professional life of an individual. The analysis of the interview reveals that as an accounting professional, the interviewee was aware of the professional code of conduct that is specified by the professional body as well as the organization where he is working. When asked about the manner in which he became aware of the professional standards, it was revealed that in the case of the professional body, the regular amendments made by the body on their websites and the members book aware him of the desired conduct. However, in the case of the organization, it is a onetime affair where the instructions are given at the time of orientation. The analysis of the interview indicated that the code of conduct laid by the professional body has a great impact on the working of him. This is because that the professional body is very strict with the adherence of code of conduct. The interviewee did not want to get complained due to the breach of any professional standards as it may lead to the suspension or even cancellation of his certificate of practice. In the context of the code of conduct laid by the organization, the level of adherence is comparatively low. This is due to the fact that the company's attitude towards the professional code of conduct is not that serious. It expects its employees to be professional but at the same time allows ample amount of time for socialization. working has caused informal relationships among the co-workers; however, while dealing with the clients, the employees ensure that they adhere to the official code of conduct as they are representatives of the company. In case of breach of any standards, the interviewee revealed that the person is given a warning twice on the breach of any standard, and even after the warning the same behavior is observed, the management penalizes the person with heavy fines. When asked about the actions that the interviewee would take in case of any unethical behavior, the interviewee responded that he would remind the person of the professional conduct and if the behavior is likely to have significant consequences, he would bring it to the notice of management. Analysis of the Professional Body: CA ANZ The professional body selected for this assignment is CA ANZ which stands for Chartered Accountants Australia and New Zealand. The professional body, CA ANZ was formed in the year 2013 after the amalgamation of the New Zealand Institute of Chartered Accountants and the Institute of Chartered Accountants Australia (ICAA). The title of chartered accountants is one of the internationally recognized professions which reflect a profession with highest professional and ethical standards and professional expertise (Australian Accountants Directory, 2017). The board governs the working of chartered accountants working in both Australia and New Zealand and has approximately 100,000 members who are financially astute. In order to become a member of CA ANZ, a person has to train for a time duration of minimum six years. The charter of this professional board is to empower its members in becoming the shapers and leaders of business and finance in both New Zealand and Australia or at any place in the world where they work (CA ANZ, 2017). The code of conduct for the members of CA ANZ in Australia is set by the Accounting Professional and Ethical Standards Board (APESB). The code of conduct, professional and ethical standards set by the board are expected to be followed by the members of CA ANZ, IPA, and CPA (CA ANZ, 20171). The CA ANZ communicates its professional standards and code of conduct through the members handbook which contains all the necessary acts that are to be followed by its members. The current code of conduct provided by the board can be categorized under the following headings: Support of consumers, society, employees and self-regulation- it includes code like communicating as per the laws or international treaties framed by the government, recognizing that consumers can rely on the member agencies for not only working within the law but also in ethical norms which are accepted, to pay fair compensation to the interns and students for the work done and demonstrate environmental responsibility and sensitivity in the work done by the CA ANZ community. Support of the work done by CA ANZ- it is expected that each member of the board is supportive of the work done by Association in ways, such as attending the award events, annual meetings, agreeing to fulfil the responsibilities on the election or invitation of Executive board and supplying volunteers for working on different committees (Communication Agencies Association, 2012). Public criticism of the sector- the members are expected for not giving any public statement that is unfair and harmful to the industry. Relationships with clients- to ensure confidentiality of clients, to not bargain any compensation on behalf of the client without his knowledge, to not develop any business relations with a third party which may create conflict with the interests of the clients. Relationships with suppliers and media- to conduct due diligence in order to ensure that the member agency does not become obligated to media or suppliers, to not obtain any confidential information from suppliers or media about the advertising plans of any other companies (Communication Agencies Association, 2012). The board takes its code of conduct and ethical standards very seriously. In case of breach of any ethical code or a complaint against a member, the board makes an investigation and takes disciplinary action, if required. Any complaints of breach of the code of ethics are handled by the Disciplinary Tribunal, the Professional Conduct Committee, and the Appeals Tribunal. The Professional Conduct Committee (PCC) investigates and decides if the complaints are legitimate and are to be forwarded to the Disciplinary Tribunal. It can levy fines, issue sanctions against the member and take publicity decisions (CA ANZ, 20172). The PCC can opt for the following courses of action against the member: Decide that there is no further action to be taken against the member Caution the member Require the member to submit dispute fees Impose several penalties in the form of agreement with the member Order the member to pay for the costs incurred by the complainant. However, if the member is found guilty in the proceedings of the Disciplinary Tribunal, the outcomes of the breach can be in the following forms: Removal of name from the register of members Suspending the member for a period of maximum five years Suspending or canceling the member's certificate of practice Penalizing the member with a maximum sum of $20,000 Ordering to return the entire fees to the complainant Censuring the member officially (CA ANZ, 2016) The board believes that it is necessary for its members to stay updated on the recent financial events and other topics which are required for effective and better working of its members. In order to further develop the intellect of its members, the board conducts conferences, regional events, seminars, provide learning opportunities and even provide tailored learning to its members. The topics covered in the learning opportunities include reporting, audit and assurance, ethics and integrity, financial advisory, superannuation, tax, corporate finance and people and leadership (CA ANZ, 2017). Similarities and Differences between the Interviewee and Professional Body From the comparison of the interviewee's responses and the review of a professional body, it is observed that the role of a code of conduct in both the cases is important. People take adherence to the professional standards seriously and ensure that the same is reflected in their work. On the breach of any professional standards, the outcome in both the cases is penalizing the person with heavy fines and cancellation of the certificate of practice. However, in the case of the professional body, the outcomes depend upon the severity of the breach. The difference also lies in the impact that the codes have on the individual who is following them. In case of organizations, it is not reflected in an individuals work as the organizations are not that strict when it comes to interpersonal relations in the co-workers which is not the case in a professional body. Personal Reflection In my opinion, the values and ethics that a person inherits guide him in taking the decisions. If an individual takes a decision which is against his values and ethics, the consequences of such decisions are likely to have an adverse impact on the person's career. Similarly, the ethical behavior demonstrated by the peers or the employers is likely to have an impact on individual's career. Staying honest with the personal values can provide a lot of benefits to ones career and reputation. It is believed that the values are responsible for guiding a person whereas the ethics are responsible for keeping the person grounded (Fisher, 2016). Values help a person in guiding his sense of determining as to what is important. A person inherits various values throughout his life; some holds greater importance than others. Ranking of these values in the psyche of a person affects the choices he makes in his career. For example, if security factor holds a greater significance for a person in comparison to the achievement factor, it is likely that the person becomes more risk averse. The person would prefer keeping the same job rather than dropping it for a risky and profitable opportunity. In terms of ethics and the code of conduct, an individual learns the personal ethics from his past experiences, upbringing, and relationships, whereas he learns professional ethics from education and the organization where he works (Fisher, 2016). Following the laid out code of conduct and being ethical would build trust in a person, and there is a possibility that people are attracted for getting support, ideas, and cooperation. It can even help the person in getting leadership opportunities as people trust him due to his professional behavior and values. In order to ensure that I act professionally and ethically in the workplace, I would make sure that I am always honorable and present myself with integrity. While working in an organization, I would be passed with a lot of confidential information, both from my colleagues and the organization; I would ensure that I keep that information to myself only as I believe that it is very significant to be honest to such confidences (Weiler Schoonover, 2001). I would have to be respectful and courteous throughout my career span as it would help in making the social interactions smooth and would help me in earning respect and avoiding unnecessary conflicts. I would also ensure that I remain honest and transparent in my work as it is a facet of my moral character and indicates positive attributes of my personality, such as loyalty, truthfulness, sincerity, fairness and other attributes (McAuliffe, 2014). Moreover, it would help in building trust and increase my personal value in front of all. It would also be necessary to work on the time management skills as being punctual would help me not only with completing my scheduled tasks but also in socializing. Another aspect that would ensure professionalism is concern about employee safety. I believe that it is the duty of every employee to report any suspicious person or misconduct seen in the organization (Root III, 2017). Reporting such misconduct would ensure that I am doing my part for maintaining the ethical conduct in the office and keeping other employees safe. Conclusion The ethics and code of conduct play a significant role in the professional life of an individual. It is reflected in the form of work behavior and the decisions taken by an individual. It has been concluded that the organizations are comparatively less serious about ethical conduct between its employees. CA ANZ has its own set of code of conduct that it communicates to its members in form of members book. In case of breach of conduct, the consequences in both the cases include penalties and fines. However, in case of CA ANZ, the consequences are more severe and depend upon the nature of the breach. References Australian Accountants Directory. (2017). About Accountants. Retrieved September 25, 2017, from https://www.australianaccountantsdirectory.com.au/about-accountants CA ANZ. (2016). The Complaints Process. Retrieved September 25, 2017, from https://www.google.co.uk/url?sa=trct=jq=esrc=ssource=webcd=1cad=rjauact=8ved=0ahUKEwjHnuaVs8DWAhUOSo8KHalmACwQFggoMAAurl=https%3A%2F%2Fwww.charteredaccountantsanz.com%2F-%2Fmedia%2F95ed8f82d6c84ff5b5ee6b3f1da51dbc.ashx%3Fla%3Denusg=AFQjCNEPhYTnWxSk72YdrY3g5qzuW0RYSQ CA ANZ. (2017). About us. Retrieved September 25, 2017, from https://www.charteredaccountantsanz.com/about-us CA ANZ. (20171). Codes and standards. Retrieved September 25, 2017, from https://www.charteredaccountantsanz.com/member-services/member-obligations/codes-and-standards CA ANZ. (20172). Making a complaint against a member. Retrieved September 25, 2017, from https://www.charteredaccountantsanz.com/about-us/complaints/complaints-about-a-member Communication Agencies Association. (2012). Code of ethics, practices, and obligations of CAANZ members. Retrieved September 25, 2017, from https://commscouncil.nz/downloads/CAANZ_Code_of_Ethics_Practices_Obligations_2012.pdf Ferrell, O. 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