CIMA P3 Syllabus C. Internal controls - CIMA - Fundamental Principles - Notes ^{3 / 10}

CIMA's Ethical Guidelines

All CIMA members and registered students are subject to CIMA's Ethical Guidelines.

These guidelines make it clear that individuals must:

• Observe the highest standards of conduct and integrity

• Uphold the good standing and reputation of the profession

• Refrain from any conduct which might discredit the profession

Despite being aimed at accountants, these guidelines are also equally relevant to any employee or manager within an organisation.

Aims of the CIMA Code of Ethics

The CIMA Code of Ethics and the International Federation of Accountants (IFAC) Code aim to:

• Identify the nature of the personal responsibility that the management accountant takes on as part of the price for getting a reasonable salary and status

• Provide guidance on how to identify the practical situations where particular care might need to be taken because of the ethical pitfalls involved

• Provide general guidance on how to address those difficult questions.

The 5 Fundamental principles and what they mean

1. Integrity

   Be straightforward and honest in all professional relationships

   For e.g. Using money from a dormant account for personal expenses would be a violation of the fundamental principle of integrity.

2. Objectivity

   No bias or conflict of interest influencing your business judgements

   For e.g. Putting in a good word for a particular supplier just because they are a childhood friend would be a violation the fundamental principle of objectivity.

3. Professional Competence & Due Care

   Keep up your professional knowledge and skill so as to give a competent professional service, using current developments and techniques

   Act diligently and within appropriate standards when providing professional services

   For e.g. Filing a client's tax return on the request of the manager despite not having completed the tax exam would be a violation of the fundamental principle of professional competence and due care.

4. Confidentiality

   Don't disclose any confidential information to third parties without proper and specific authority

   You can, however, if it required by the law OR if it is permitted by law and authorised by the client.

   Obviously never use it for personal advantage of yourself or third parties

5. Professional behaviour

   A professional accountant should act in a manner consistent with the good reputation of the profession

   Refrain from any conduct which might bring discredit to the profession

Ethical Conflicts

Resolution of ethical conflicts is also covered by CIMA's guidance. 

Potentially difficult situations include:

• Pressure from an overbearing supervisor

• Pressure from a friend or relation

• Divided loyalties