Frameworks of accounting 4 / 5

Rules (Compliance) Based and Framework (Ethical) Based Approaches

Framework / Ethics Based Approach

The CIMA Code of Ethics takes a ‘framework/ethics based’ approach. 

A framework/ethical based approach has the following attributes:

  • It is based on principles and core values and encourage individuals to following the spirit of the law.

  • It provides the means to identify, evaluate and address ethical problems.

  • It consists of ethical guidelines and standards for professional accountants.

  • It encourages best practice and provides guidance on how to behave and reassure external stakeholders about the profession.

  • It is not required by law

Purpose of CIMA Code Of Ethics

It can be used to judge the behaviour of members under CIMA's disciplinary procedures.

It aims to identify the nature of personal responsibility that the management accountant takes on as part of the price for getting reasonable salary and status

Compliance / Rules Based Approach

A compliance/rules based approach has the following attributes:

  • A list of commands/rules are provided which must be followed to the letter.

  • The ethical rules provide a clear means to identify what must be done.

  • It is required by law.

  • It sets out specific guidance for each specific ethical dilemma

  • The governing body anticipates all potential ethical problems

  • It is also known as a tick box approach.