Ethics Help

coops90coops90 New MemberPosts: 5Registered
I am struggling a little with the Professional Ethics Unit (Old Standards). Help would be much appreciated with the following questions:

You are at a meal when one of the other guest's know that you are an accountant & starts asking about tax issues. What are the ethical issues what actions should be taken?


When placed in a compromising sitiation (i.e. You are on an interviewing panel for a job that a very good friend of your has applied for) - How to deal with the situation? Should you help your friend by providing confidential information? Should you inform your boss about the relationship? Should you be involved in the decision making process to who gets the job?

Comments

  • MonsoonMonsoon Font Of All Knowledge Posts: 4,071FMAAT, AAT Licensed Accountant
    1. I hate these questions. I haven't got the foggiest. And, I'm an accountant in practice. I just use common sense, but fail at verbalising it. Sorry.

    2. Do not provide confidential info. Yes inform the boss. Up to the boss whether you're involved in the decision making - but if you feel you will be unduly favourable to your friend you should opt out.
  • MonsoonMonsoon Font Of All Knowledge Posts: 4,071FMAAT, AAT Licensed Accountant
    Also on 1 - more helpful but less direct answer:

    I either say, "Ugh, you want me to talk about work? I'm off duty!" Make light of it and hope they change the subject. I know some practitioners say, "Here's my card, please call in office hours to make an appointment" :lol:

    Or, you can offer vague advice but if it sounds in depth then advise they get professional advice as it's too complex to discuss in 2 minutes over dinner.

    Potential problems are them relying on your semi-drunk advice I guess!!

    I can't verbalise this into ethical issues though. I can't see how ethics comes into it. It's more of a professional standards issue, to my mind.
  • AAT Level 3AAT Level 3 Feels At Home Posts: 75Registered
    I think the correct answer is that you don't give them the advice. I think the social surroundings of the situation hint towards this and the fact you are an accountant does not mean you are a tax expert.

    The new ethics exam I sat was a bit tricky
  • sdvsdv Experienced Mentor Posts: 585Registered
    coops90 wrote: »
    I am struggling a little with the Professional Ethics Unit (Old Standards). Help would be much appreciated with the following questions:

    You are at a meal when one of the other guest's know that you are an accountant & starts asking about tax issues. What are the ethical issues what actions should be taken?

    the following guidence from AAT Ethics guildence (old standards)



    3.6.4 A member providing professional tax services has a duty to put forward the best position in favour of a client or an employer. However, the service must be carried out with
    professional competence, must not in any way impair integrity or objectivity, and must be consistent with the law.



    coops90 wrote: »
    When placed in a compromising sitiation (i.e. You are on an interviewing panel for a job that a very good friend of your has applied for) - How to deal with the situation? Should you help your friend by providing confidential information? Should you inform your boss about the relationship? Should you be involved in the decision making process to who gets the job?

    2.2 Objectivity

    Members should be fair and should not allow prejudice or bias or the influence of others to override objectivity.


    In dealing with independence, members must address both:
    • independence of mind, ie. the state of mind which has regard to all considerations
    relevant to the task in hand but no other - independence of mind is also referred to
    as objectivity;
    • independence in appearance, (or independence that can be demonstrated) ie. the
    avoidance of situations inducing so obvious a threat to independence that an informed third
    party would question the member’s objectivity. Issues of independence in appearance are
    most likely to arise in relation to undertaking audit or other public financial reporting
    assignments. These aspects are dealt with in Section 5.2;

    In situations which do not necessarily require independence in appearance, members are generally able to safeguard their objectivity by analysing the threats and pressures which arise, and weighing against them the acknowledged safeguards which may be employed to negate those threats and pressures or reduce them to acceptable levels. Many safeguards arise as a result of:

    • a member’s normal strength of character and professionalism which enables him or her to confront the threats and pressures which may be exerted on him or her by employers or clients;
    • the fear of pressures of legal accountability;
    • the possibility of professional discipline and enforcement; and
    • the loss of reputation.

    Members have an obligation to ensure that personnel engaged in professional work are aware of the need to preserve their objectivity and, where appropriate, to demonstrate their independence.
  • coops90coops90 New Member Posts: 5Registered
    Thanks for your help, much appreciated!

    One more question... Is it correct that records should be kept for seven years and that taxation records should be kept for eight?
  • AAT Level 3AAT Level 3 Feels At Home Posts: 75Registered
    Records 6
    Tax 7
  • coops90coops90 New Member Posts: 5Registered
    Records 6
    Tax 7

    That is what I thought but in Osborne its says 7 & 8?
  • AAT Level 3AAT Level 3 Feels At Home Posts: 75Registered
    coops90 wrote: »
    That is what I thought but in Osborne its says 7 & 8?

    I think that is an error. The Kaplan books are also riddled with errors. We were told for the exam records are 6 and tax is 6+1 that was the easiest way I remembered it.
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