In the first instance we must focus on the primary function of the public accountant within the organization, for this, it must be directed according to the principles established in the CODE OF PROFESSIONAL ETHICS, which are the fundamental basis within decision-making and support to the administration in that it provides some characteristics, which allow the information to be reliable and timely for all users.
It is of utmost importance the responsibility that the accountant must have today, which has gone from the books to embrace technology, information plays a relevant role for economic decision-making, the accountant is obliged to supply better quality, timely data, understandable, and most importantly transparent.
The intention of the IFAC International Code of Ethics is that it serves as a model on which national ethical guidelines are based and establishes standards of conduct for professional accountants and indicates the fundamental objectives and principles that must be observed by professional accountants in order In achieving common goals, the lack of credibility of corporate-level accounting and the amount of fraud recently discovered in multiple companies is unfortunate, which has put the quality of ethics of public accounting in jeopardy.
Development of the topic
To talk about ethics, we must establish the differences between ethics and moral. Etymologically, the word ethics comes from the Greek ethos, which means dwelling, that is, the behavior of a person, and moral comes from the Latin mos, which means custom, a set of rules that is willing in society. There are different types of ethics which are the result of divisions, presented according to thought or knowledge, reflecting the economic or social level, which makes it important to affirm that individuals of the same economic level tend to have similar concepts and demonstrations of them. In the workplace, every worker has or should develop a professional ethic that defines the loyalty they owe to their work, profession, company and colleagues, the ethics of a profession is a set of standards,in terms of which we define as good or bad some professional practice and relationships.
There are three general factors that influence the individual when making ethical or unethical decisions, which are:
Individual Values: The attitude, experiences and knowledge of the individual and the culture in which he finds himself will help him determine what is right or wrong in an action.
Behavior and Values of Others: The good or bad influences of important people in the life of the individual, such as parents, friends, colleagues, teachers, supervisors, political and religious leaders, will guide their behavior when making a decision.
Official Code of Ethics: This code directs the ethical behavior of the employee, while without it he could make unethical decisions.
International Federation of Accountants IFAC
Formally approved in Munich in 1977 in the agreement of 49 countries and 63 associations, at the XI International Congress constituted by the ICCAP that became the IFAC The IASC was not involved in the change.
The IFAC is made up of different committees in charge of regulating different modalities made up of committees including: the education committee, the ethics committee, the financial and accounting administration committee, the public sector committee, the international audit practices committee, and the number committee. members. At present, it groups 163 organizations from 119 countries, which are 2,500,000 of public accountants.
"The objectives recognized by the code of ethics are to work by the highest standards of professionalism in order to achieve high levels of performance and satisfy the interests of the public that are based on 4 components that are necessary to fulfill the objectives": credibility, professionalism, quality of services, trust that in turn require fundamental principles to provide information with due care and competence: integrity, objectivity, professional competence and due care and confidentiality.
The objectives and principles are not characterized by having uses to solve ethical problems of a professional accountant in a specific case, what it does is to provide guidance on the application in practice of these in relation to typical situations that occur in the accounting profession.
The Code is divided into three parts: “a) applies to all professional accountants unless otherwise specified, b) applies only to those professional accountants in public professional practice, c) applies to employed professional accountants and may also apply, in appropriate circumstances, to professional accountants in public professional practice who are employed ”:
Similarities and differences IFAC code of ethics and law 43 of 1990
Similarities: Law 43 of 1990 is based on the IFAC code of ethics. therefore it is directed in the search for the quality of the accounting profession; The mission of these codes is to guide the professional through standards that aim to satisfy the needs and requirements of the users of the information, in credibility and professionalism emphasizing the fundamental principles, equal for all professional accountants that allow them develop their work objectively and be updated with technological and scientific advances to be competitive.
Differences: Aspects contemplated in the IFAC code of ethics Professional practice, the tax services provided by the professional accountant, the latter must place the client or employer in the best condition, being objective and integrated with respect to the law.
An error or omission in a tax declaration from a previous year must be communicated to the client or employer so that they take the corresponding measures, in case of omission on the part of the latter, the accountant must safeguard his responsibility, informing the corresponding authorities with prior authorization from the employer or client, unless it is an express requirement by law.
The IFAC Code of Ethics presents examples of conflicts that may arise in professional practice and possible solutions to them.
Activity Beyond Borders: This refers to the provision of professional services in a foreign country, and must apply the most demanding requirements among the IFAC code of ethics.
Independence: Members of assurance teams, firms and signature networks should be independent of assurance clients, assurance contracts seek to enrich the credibility of the information being valued.
Money of the Clients: In the public professional practice the accountant must not keep money from the clients, if there is reason to consider that they were obtained or used in illegal activities; in the event of this situation, they must be kept separate from personal or firm monies, use them only for the purpose for which they are intended and account at any time for these.
Conflict of interest: Accountants employed have a duty of loyalty towards their employer and profession, these may come into conflict their priority should be to support the legitimate and ethical objectives of the organization and rules and procedures that support it.
Although the IFAC code of ethics and the one established in each country determine, some principles, objectives and guidelines to follow for the optimal exercise of the accounting profession, there have been shortcomings in its application, implementing creative accounting, “in which it manipulates the information that is revealed to the users, affecting the allocation of resources and the economic interests of the interested parties in the companies ”. It is conceived as a strategy to convey a more optimistic view of the signatures to the users. When a norm does not lend itself to a specific interpretation, it leads to the application of unethical or fraudulent methods, such as those presented at the end of 2001 in several multinationals; concrete case the scandal in which Enron (Texas) was involved,who expanded his energy generation activity to the most lucrative of commercialization, these activities culminated in the evasion of taxes, concealment of the liabilities that at a certain moment came to light, which generated profound social consequences, this company was a generous contributor to the political class of the United States, where individual interests of the rulers who were in power at the time prevailed; “His technique for evading taxes was to transfer the benefits to a partner company that was not subject to United States tax laws, such as a bank based in a tax haven.concealment of the liabilities that at a certain moment came to light, which generated profound social consequences, this company was a generous contributor to the political class of the United States, where individual interests of the rulers who were in that moment in power; “His technique for evading taxes was to transfer the benefits to a partner company that was not subject to United States tax laws, such as a bank based in a tax haven.concealment of the liabilities that at a certain moment came to light, which generated profound social consequences, this company was a generous contributor to the political class of the United States, where individual interests of the rulers who were in that moment in power; “His technique for evading taxes was to transfer the benefits to a partner company that was not subject to United States tax laws, such as a bank based in a tax haven.“His technique for evading taxes was to transfer the benefits to a partner company that was not subject to United States tax laws, such as a bank based in a tax haven.“His technique for evading taxes was to transfer the benefits to a partner company that was not subject to United States tax laws, such as a bank based in a tax haven.
This associate, after collecting a premium for his services, then returns his benefits to the United States, under a legal figure that is exempt under North American tax laws. ”
The Sarbanes Oxley Act of 2002: This law was issued in response to the American government in response to these financial-accounting scandals that began in late 2001 and continued with others that had a high impact on society, its purpose is to protect the interest of shareholders and investors and build the confidence of the American public in the stability and transparency in capital markets, by creating a supervisory regime for the auditors of public companies and determining the responsibilities of executive directors, directors, attorneys and counters clearly, giving way to a new approach to internal control; With this law, the SEC, a commission that will exercise supervisory functions, and the PCAOB, the supervisory board for the accounting of public companies, were created.in charge of adopting the standards under which this law is developed.
conclusion
The Colombian ethical legal framework contained in Law 43 of 1990, is nothing more than a summary of the IFAC Code of Ethics, which has not taken into account the appropriate adaptation to an environment and culture with different characteristics such as ours in which it is easy to give a different dimension to the knowledge and behaviors received in the university cloisters to develop the Profession.
Accountant, seeking to satisfy individualisms without taking into account that an entire guild is affected, losing credibility and affecting quality and hinting at the lack of commitment and professionalism.
In the National Code of Ethics, important issues are ignored that, at a certain moment, can help to resolve conflicts that arise in the performance of the profession.
Bibliography
- Mantilla, Samuel Alberto. IFAC Code of Ethics. (Translated into Spanish-accounting science department. Javeriana University, January 2002) Law 43 of 1990, chapter four Soto Mejía Eutimio - Montes Carlos Alberto - International Accounting 2005, Armenia Universidad del Quindío 2005.SalazarMonterrey Mayoral, Juan. Between creative accounting and accounting crime In: international magazine Legis de accounting y Auditing, No. October - December 2002, pp. 117-138 Sarbanes Oxley Act of 2002
Mantilla, Samuel Alberto. IFAC Code of Ethics. (translated into Spanish- Department of Accounting Sciences. Javeriana University, January 2002) Page 953
Mantilla, Samuel Alberto. IFAC Code of Ethics. (translated into Spanish- Department of Accounting Sciences. Javeriana University, January 2002) Page 954
Mayoral Monterrey, Juan. Between Creative Accounting and Accounting Crime International Journal of Accounting and Auditing Legis. Page 117
Ruiz Franco, Rafael. Requiem for Trust, February 2002 Page 11
