Fundamental Principles
Fundamental Principles of Professional Ethics
Professional accountants are expected to adhere to ethical standards to maintain trust, integrity, and professionalism. The International Ethics Standards Board for Accountants (IESBA) identifies five fundamental principles:
1. Integrity
Definition: Be straightforward, honest, and truthful in all professional and business relationships.
Key Points:
Avoid deceit or misrepresentation.
Do not engage in activities that would discredit the profession.
2. Objectivity
Definition: Do not allow bias, conflicts of interest, or undue influence to override professional judgment.
Key Points:
Base decisions on facts, not personal interests.
Maintain impartiality in auditing, reporting, or advisory roles.
3. Professional Competence and Due Care
Definition: Maintain professional knowledge and skills at a level required to provide competent services.
Key Points:
Continuously update skills and knowledge.
Perform tasks diligently, thoroughly, and in accordance with technical standards.
4. Confidentiality
Definition: Respect and protect information obtained during professional work.
Key Points:
Do not disclose client or employer information without proper authority.
Use confidential information only for its intended professional purpose.
5. Professional Behavior
Definition: Comply with laws and regulations and avoid actions that discredit the profession.
Key Points:
Avoid conduct that would harm the reputation of the accounting profession.
Uphold the public interest in all professional matters.
✅ Tip for Students: These principles are often summarized with the acronym “I O C C P”:
I – Integrity
O – Objectivity
C – Competence & Due Care
C – Confidentiality
P – Professional Behavior