The International Federation of Accountants (IFAC) has recently issued a revised "Code of Ethics for Professional Accountants" (IFAC Code). As a requirement for membership in IFAC, a national accounting organization must either adopt the IFAC Code or adopt a code of conduct that is not "less stringent" than the IFAC Code. In this paper, we examine the extent to which 158 national accounting organizations have adopted the revised IFAC Code as their own. Our results (...) indicate that 80 of our sample organizations have adopted the IFAC Code (sometimes with minor modifications), while the remaining 78 opted not to utilize the model IFAC Code. We then test the hypothesis that national accounting organizations in lower income economies would be less likely to adopt the IFAC Code than those in high income economies. Our results do not support the hypothesis. We argue that one potential reason for such a finding is that adopting the IFAC Code may be a cost effective means of adopting a code of ethics for organizations in lower income economies. (shrink)

The International Federation of Accountants (IFAC) has issued a revised “Code of Ethics for Professional Accountants” (IFAC Code). The IFAC Code is intended to be a model code of ethics for national accounting organizations throughout the world. Prior research demonstrates that approximately 50% of IFAC member organizations have adopted the IFAC Code as their organizational code of conduct. There is therefore empirical evidence that international convergence of accounting ethical standards is occurring. We employ Hofstede’s ( (...) 2008 , http://www.geert-hofstede.com/hofstede_dimensions.php ) cultural dimensions in an attempt to empirically explain accounting organizations’ decisions about whether to adopt the IFAC Code or to retain their organization-specific code. Our results indicate that accounting organizations in cultures with high levels of Individualism and Uncertainty Avoidance are less likely to adopt the model IFAC Code. Organizations in high Individualism and Uncertainty Avoidance societies are therefore less likely to surrender the setting of ethical standards to an outside, international organization. (shrink)

The American Institute of certified public accountants (AICPA) has promulgated a Code of Professional Conduct , which has served as the primary ethical standard for public accountants in the United States for more than 20 years. It is now out of date and needs to be replaced with a code of ethics. Just as U.S. generally accepted accounting principles are being migrated toward “principles-based accounting” as part of a convergence with international financial reporting standards, a similar process needs to occur (...) with ethics. This article organizes the primary rules of the AICPA Code around five essential virtues: objectivity, integrity, inquisitiveness, loyalty, and trustworthiness. These virtues correspond to the general principles set forth in the Code of Ethics for Professional Accountants of the International Federation of Accountants (IFAC). From this virtue ethics perspective, various rules of the AICPA Code are critiqued as being inadequate at best, and poorly crafted at worst. The article concludes with the proposition that principles-based ethics serves the profession and the financial reporting process better than the current rules-based approach. (shrink)

The paper identifies in the literature two categories of codes of ethics, inspirational and prescriptive, and introduces new classification categories of allodial and decretal. The first classification is based on the identity of the ethics decision‐maker – the authors or the addressees of codes. The second classification is based on whether operational definitions are applied by the codes. Such concrete definitions may be in the rules themselves, in related documents or be known from shared knowledge. The second classification has importance (...) if national associations of accountants use codes as a means for assurance of specific outcomes of defined ethical behaviours. For the study, a survey of 57 codes of ethics issued by national associations of professional accountants was undertaken to determine the basic features of codes and to analyse their content. The areas of ethical concern in national associations were identified and compared to the IFAC model code for professional accountants. The paper reports that national organisations of accountants have promulgated decretal codes in 96% of cases examined. As these codes contain operational definitions, their outcomes can be scientifically measured and sanctions for breaches fairly and reasonably imposed. (shrink)

The purpose of this paper is to propose a framework of ethics education that promotes the structured learning of ethics in the accounting discipline. The Ethics Education Framework (EEF) is based on three key inter-related components that includes: Rest’s (1986) Four-Component Model of ethical decision-making and behaviour; the key cognitive and behavioural objectives of ethics education; and the discrete and pervasive approaches to delivering content. The EEF providesuniversity students and professional accountants a structure to learn to identify, analyse, and resolve (...) ethical issues to the point of action. The EEF is a four-stage learning continuum represented as a set of building blocks which introduces ethical concepts and then reinforces and develops new levels of understanding with progressive stages. This paper describes the EEF, and includes a discussion of how it compares with other ethics education models, and an analysis of the support through responses by professional organisations (based on an Exposure Draft issued by the International Federation of Accountants (IFAC), as the initial International Education Practice Statement). The IFAC has now revised its International Education Standard (IES 4) in relation to ethics, with a commentary period till July 2011. (shrink)

The purpose of this paper is to propose a framework of ethics education that promotes the structured learning of ethics in the accounting discipline. The Ethics Education Framework is based on three key inter-related components that includes: Rest’s Four-Component Model of ethical decision-making and behaviour; the key cognitive and behavioural objectives of ethics education; and the discrete and pervasive approaches to delivering content. The EEF providesuniversity students and professional accountants a structure to learn to identify, analyse, and resolve ethical issues (...) to the point of action. The EEF is a four-stage learning continuum represented as a set of building blocks which introduces ethical concepts and then reinforces and develops new levels of understanding with progressive stages. This paper describes the EEF, and includes a discussion of how it compares with other ethics education models, and an analysis of the support through responses by professional organisations, as the initial International Education Practice Statement). The IFAC has now revised its International Education Standard in relation to ethics, with a commentary period till July 2011. (shrink)

This paper reports findings from a study into national associations of accountants from the perspective of the model code of the International Federation of Accountants (IFAC), Code of Ethics for Professional Accountants. Using data collected from a survey document, the paper analyses the extent of the model code’s influence in an international process of harmonisation of ethical rules for accountants. Obstacles to the adoption of the model code are examined, as is the impact that government supervision of codes has (...) had on harmonisation efforts. Particular attention is paid to the relationship between professional independence and close family relationships and culture. Findings are also presented on other issues of code content, and the most appropriate body for interpreting national codes is identified. These items were included as matters of then current concern to the Ethics Committee of IFAC. (shrink)

This paper advocates inclusion of a wider set of ethical theories into the accounting canon. We find that the mainstream accounting curriculum does not adequately engage with non-Western ethical theories or contemporary Western ethical thought, as evidenced by the ethics content of core accounting texts and the International Federation of Accountants’ ethics publications. We suggest adopting a ‘thematic’ approach to teaching ethics as an integrated part of accounting curricula. This approach addresses two competing principles implicit in International Education Standard 4: (...) (i) that all accountants need to be educated to meet global ethical standards, and (ii) that teaching ethics should accommodate ethical traditions and practices that could vary between nations and cultures. The thematic approach we propose requires less additional space within existing accounting curricula and less additional preparation by accounting educators than the alternative approach of teaching substantive ethical theories from a sufficiently diverse range of cultures and traditions. The paper also provides exemplars of this thematic approach to teaching ethics in accounting. (shrink)