Professional Behaviour Essay

A framework of professional principles can guide behaviour where the law is not applicable, not clear, or remains silent. Behaving legally is the minimum standard of behaviour expected of the ‘ethical’ accountant. Some behaviour, while legal, may still be regarded as ‘unethical’. Many aspects and decisions within accounting roles, at all levels, are not covered by the law. Therefore, in many different situations, the law is not sufficient to guide a professional’s behaviour, but a professional is also expected to behave in accordance with accepted professional principles. Acting in the public interest : The public is everyone who is affected or could potentially be affected by the work or shortcomings of accountants and auditors, including third party institutions. The interest is the potential impact of accountants’ work on the public, whether that be beneficial or harmful. What actions are the public interested in as far as accountancy is concerned? Money laundering * ‘the conversion or transfer of property, knowing that such property is derived from criminal activity or from an act of participation in such activity, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such activity to evade the legal consequences of his action’; and * ‘the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from criminal activity or from an act of participation in such activity’. Insider trading is another form of corruption. This is making investor decisions based on confidential information. Insider trading is a criminal offence in most countries, although the effectiveness of enforcement varies. The reasons it is usually illegal are: * It is unfair on investors who do not have access to the information * It may deter investors from participating in the market at all, undermining the basic purpose of markets, which is to allow companies to raise capital * It may destabilise markets by encouraging the trading of stock based on rumours * It involves profiting from a breach of confidence, at the expense (at least partially) of people to whom the insider has a duty (such as their employer, and their employer’s shareholders) Defenders of insider trading claim that it improves market efficiency by allowing confidential information to influence prices more quickly. However, in most situations insider trading is considered to be highly damaging.