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Accountants are now bound by a revised code of
ethics to take action when they perceive a threat to their ethical standards,
according to experts at the SAIPA Accounting Indaba on Tuesday.
SAIPA, the South African Institute of Professional
Accountants, held its indaba – with the theme “The Future-Ready
Professional Accountant in the 4th Industrial Revolution” – at the Cape
Town International Convention Centre from 14 – 16 August.
Speaker Saadiya Adam, a technical advisor for the International
Ethics Standards Board for Accountants (IESBA), said the ethics board’s recently
implemented revised code makes it clear that where a threat to ethical
standards is perceived, action must be taken to bring the threat down to an
The IESBA is an independent standard-setting body
for professional accountants worldwide.
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“So, if a professional accountant evaluates
that a threat is at an unacceptable level, he or she must use safeguards,”
said Adam. “This safeguard action could include declining to do the work
Threats could include self-interest – for instance
the promise of a lucrative “bonus” depending on the decision taken by
the accountant; too much familiarity between the client and the accountant; and
even intimidation by threatening the accountant’s job.
The revised code also asks that an accountant takes
a step back when evaluating a potential threat. To see if a threat is at an
unacceptable level an accountant must look for additional information and also
at the environment surrounding the issue, according to Adam.
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Other speakers underlined the importance of ethical
Tax Ombud Judge Bernard Ngoepe noted that SA needs
investor confidence and, therefore, “those tasked to look after our
monies” must be held accountable and made to stick to ethics principles.
“I believe there are some problems which go
beyond just the accounting profession. A lot of other professions – like the
legal profession – have issues too. For instance, how can you write a three-page
opinion for government and charge R3m?” asked Ngoepe.
He said it does not matter to him how big an
accounting firm is, as long as every single individual in that institution is
“I sympathise with the accounting profession.
To fix some of these things we may have to start creating the kinds of
individuals we want much earlier. We need to start moulding (ethical) people
earlier. You must factor in public interest too,” he added.
Tax and corporate law specialist Ettiene Retief said
many people rely on the audit industry and the information it produces.
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“Some say the audit profession has gotten too
much control and in Europe there is talk about breaking up the dominance of
large international auditing firms,” commented Retief during a panel
“I do not think that will fix it. It is not
just about an audit function, but about an assurance function. I think in
moving forward the industry should focus on the quality of the assurance it
He emphasised that the integrity of the audit
profession is also about its mindset towards questioning when something appears
out of place or raises a concern.
“If it looks like a duck, it does not mean it
is a duck – it must also quack like a duck,” said Retief.