The high profile corporate collapses in the United States and other countries around the globe in 2001-3 have caused serious erosion of public confidence in the accountancy profession worldwide.
In order to regain and further strengthen the lost public confidence the lawmakers, regulators and accountancy professional bodies around the world have embarked upon various initiatives.
In the United States, the United States Congress has enacted the Sarbanes-Oxley Act of 2002. This Act requires, inter alia, that the accountancy firms based in the U.S.A. should be registered with Public Company Accounting Oversight Board (PCAOB) for the purpose of monitoring their compliance with laws and standards. In the United Kingdom and European Union too, the Governments are contemplating legislative measures to strengthen independence and oversight of the accountancy profession.
The International Federation of Accountants (IFAC) too has issued an Exposure Drafts titled “ Proposed Revised Code of Ethics for Professional Accountants” in July 2003 which was further revised November 2003.
The IFAC Code places greater emphasis on the subject of Independence of Professional Accountants in Public Practice. The Code, which is applicable to all accountants in diverse fields, provides separate sections for Professional Accountants in Public Practice as well as for Professional Accountants in Business. This Code is currently being reviewed by a Steering Committee appointed by the IFAC Ethics Committee.
South Asia as a region has its own unique and diverse professional, legal economic and social framework. It was in this context that SAFA felt the necessity to develop its own Code of Ethics for Professional Accountants primarily on the basis of the Code of Ethics and exposure drafts issued by the International Federation of Accountants from time to time. For this purpose a survey of the existing Code of Ethics of SAFA Member Bodies was conducted along with a study of the corporate legal requirements in the respective countries. The result is the report of the "Code of ethics for professional Accountants in SAFA countries".
This report is based on the premise that standards based on ethics are not only preferable to rule based standards but they are also in public interest. Professional accountants must apply safeguards, moral and financial, to eliminate threats to ensure that ethical compliance is never compromised. The Code establishes a regional model, with the recommendation that no SAFA Member Body or firm applies less stringent standards than those stated in the Code unless the law, regulation or culture of a SAFA Member Body provides otherwise.
The Code is divided into three parts:
(a) Part A applies to all professional accountants.
(b) Part B applies to professional accountants in public practice.
(c) Part C applies to professional accountants in business.
The Code revolves around the fundamental principles, which are: (a) Integrity, (b) Objectivity, (c) Professional Competence, (d) Due diligence, (e) Confidentiality and (f) Professional Behavior. For detailed Click Here