Topic: Comparison of Ethical Standards, IIA, IMA and AICPA

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My part is focusing on IIA,

For IIA,

First part, discuss the stander of IIA, use resource below to compare the similar Ethic code between IIA, IMA, AICPA.

Second part, discuss the difference between IIA, IMA, AICPA., for example IIA are focus on what? How it apply? When it apply? Why choose IIA not IMA or AICPA. For this part please give examples, at least two. Thanks

Last part, discuss, at what situation IIA has its disadvantage. I will send you the book as well. Give one example.

You can choose change this paper’s sentence structure, but those question must be covered.

NOTE, PLEASE HIGHLIGHT THE KEY POINT.

That will be a outline for my presentation.

 

 

 

The IIA Code of Ethics

Principles

Internal auditors are expected to apply and uphold the following principles:

1. Integrity

The integrity of internal auditors establishes trust and thus provides the basis for reliance on their judgment.

2. Objectivity

Internal auditors exhibit the highest level of professional objectivity in gathering, evaluating, and communicating information about the activity or process being examined. Internal auditors make a balanced assessment of all the relevant circumstances and are not unduly influenced by their own interests or by others in forming judgments.

3. Confidentiality

Internal auditors respect the value and ownership of information they receive and do not disclose information without appropriate authority unless there is a legal or professional obligation to do so.

4. Competency

Internal auditors apply the knowledge, skills, and experience needed in the performance of internal audit services.

Rules of Conduct

1. Integrity

Internal auditors:

• 1.1. Shall perform their work with honesty, diligence, and responsibility.
• 1.2. Shall observe the law and make disclosures expected by the law and the profession.
• 1.3. Shall not knowingly be a party to any illegal activity, or engage in acts that are discreditable to the profession of internal auditing or to the organization.
• 1.4. Shall respect and contribute to the legitimate and ethical objectives of the organization.

2. Objectivity

Internal auditors:

• 2.1. Shall not participate in any activity or relationship that may impair or be presumed to impair their unbiased assessment. This participation includes those activities or relationships that may be in conflict with the interests of the organization.
• 2.2. Shall not accept anything that may impair or be presumed to impair their professional judgment.
• 2.3. Shall disclose all material facts known to them that, if not disclosed, may distort the reporting of activities under review.

3. Confidentiality

Internal auditors:

• 3.1. Shall be prudent in the use and protection of information acquired in the course of their duties.
• 3.2. Shall not use information for any personal gain or in any manner that would be contrary to the law or detrimental to the legitimate and ethical objectives of the organization.

4. Competency

Internal auditors:

• 4.1. Shall engage only in those services for which they have the necessary knowledge, skills, and experience.
• 4.2. Shall perform internal audit services in accordance with the International Standards for the Professional Practice of

Internal Auditing.

• 4.3. Shall continually improve their proficiency and the effectiveness and quality of their services.

 

Institute of Management Accountants

Statement of Ethical Professional Practice

Members of IMA shall behave ethically. A commitment to ethical professional practice includes overarching principles that express our values, and standards that guide our conduct.

Principles

IMA’s overarching ethical principles include: Honesty, Fairness, Objectivity, and Responsibility. Members shall act in accordance with these principles and shall encourage others within their organizations to adhere to them.

Standards

A member’s failure to comply with the following standards may result in disciplinary action.

1. Competence

Each member has a responsibility to:

1. Maintain an appropriate level of professional expertise by continually developing knowledge and skills.
2. Perform professional duties in accordance with relevant laws, regulations, and technical standards.
3. Provide decision support information and recommendations that are accurate, clear, concise, and timely.
4. Recognize and communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity.
5. Confidentiality

Each member has a responsibility to:

1. Keep information confidential except when disclosure is authorized or legally required.
2. Inform all relevant parties regarding appropriate use of confidential information. Monitor subordinates’ activities to ensure compliance.
3. Refrain from using confidential information for unethical or illegal advantage.

III. Integrity

Each member has a responsibility to:

1. Mitigate actual conflicts of interest, regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of any potential conflicts.
2. Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
3. Abstain from engaging in or supporting any activity that might discredit the profession.
4. Credibility

Each member has a responsibility to:

1. Communicate information fairly and objectively.
2. Disclose all relevant information that could reasonably be expected to influence an intended user’s understanding of the reports, analyses, or recommendations.
3. Disclose delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.

Resolution of Ethical Conduct

In applying the Standards of Ethical Professional Practice, you may encounter problems identifying unethical behavior or resolving an ethical conflict. When faced with ethical issues, you should follow your organization’s established policies on the resolution of such conflict. If these policies do not resolve the ethical conflict, you should consider the following courses of action:

1. Discuss the issue with your immediate supervisor except when it appears that the supervisor is involved. In that case, present the issue to the next level. If you cannot achieve a satisfactory resolution, submit the issue to the next management level. If your immediate superior is the chief executive officer or equivalent, the acceptable reviewing authority may be a group such as the audit committee, executive committee, board of directors, board of trustees, or owners. Contact with levels above the immediate superior should be initiated only with your superior’s knowledge, assuming he or she is not involved. Communication of such problems to authorities or individuals not employed or engaged by the organization is not considered appropriate, unless you believe there is a clear violation of the law.
2. Clarify relevant ethical issues by initiating a confidential discussion with an IMA Ethics Counselor or other impartial advisor to obtain a better understanding of possible courses of action.
3. Consult your own attorney as to legal obligations and rights concerning the ethical conflict.

 

 

AICPA Code of Conduct

Principles

(1) Responsibilities

The umbrella statement in the Code is that the overriding responsibility of CPAs is to exercise sensitive professional and moral judgments in all activities. By linking professional conduct to moral judgment, the AICPA Code recognizes the importance of moral reasoning in meeting professional obligations.

(2) The Public Interest

The second principle defines the public interest to include “clients, credit grantors, governments, employers, investors, the business and financial community, and others who rely on the objectivity and integrity of CPAs to maintain the orderly functioning of commerce.”

This principle calls for resolving conflicts between these stakeholder groups by recognizing the primacy of a CPA’s responsibility to the public as the way to best serve clients’ and employers’ interests.

(3) Integrity,

Integrity has been discussed already in this chapter. As a principle of CPA conduct,

integrity recognizes that the public trust is served by (1) being honest and candid within the constraints of client confidentiality, (2) not subordinating the public trust to personal gain and advantage, (3) observing both the form and spirit of technical and ethical standards, and (4) observing the principles of objectivity and independence and of due care.

(4) Objectivity and Independence

Objectivity requires that all CPAs maintain a mental attitude of impartiality and intellectual honesty and be free of conflicts of interest in meeting professional responsibilities.

Independence applies only to CPAs who provide attestation services (i.e., auditing), not tax and advisory services. The reason lies in the scope and purpose of an audit. When conducting an audit of a client’s financial statements, the CPA gathers evidence to support an opinion on whether the financial statements present fairly, in all material respects, the client’s financial position and the results of operations and cash flows in accordance with

GAAP. The audit opinion is relied on by the public (external users), thereby triggering the need to be independent of the client entity to enhance assurances. In tax and advisory engagements, the service is provided primarily for the client (internal user) so that the CPA might become involved in some relationships with the client that might otherwise impair audit independence but do not come into play when providing nonattest services; nonattest services do require objectivity in decision making to protect the public interest.

(5) Due Care

Independence is required both in fact and in appearance. Because it is difficult to determine independence in fact because it involves identifying a mindset, CPAs should avoid relationships with a client entity that may be seen as impairing objective judgment by a “reasonable” observer.

(6) Scope and Nature of Services.