Chartered Accountants Regulatory Board

Framework for Ethical Decision Making 2010

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Framework for Ethical Decision Making The Code of Ethics sets out a Framework approach for ethical decision making, the summary document may be of assistance when trying to resolve an ethical problem. See Code of Ethics 100.18 and Appendix to Part A and the flow chart included in Appendix 1. Steps to resolving an ethical problem. 1. Having you 2. Gathered all the relevant facts? Have you made assumptions can these be replaced by facts?

Relevant Parties Who are the individuals, organisations and other stakeholders affected? How are they affected? What conflicts exist between stakeholders?

3.

Ethical Issues Involved What are the professional, organised and personal ethical issues? Will these ethical issues affect the reputation of the profession or the public interest? Have you referred to the Code of Ethics?

4.

Fundamental Principles in Question What are the threats to compliance with the fundamental principles of: Integrity Objectivity Professional competence and due care Confidentiality Professional Behaviour

Have you considered the threats of: Self Interest Self review Advocacy Familiarity Intimidation

Have you documented the threats? Are the threats clearly insignificant? Can any safeguards be applied to eliminate or reduce the threats to an acceptable level?
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5.

Established Internal Procedures Have you referred to your organisations internal policies and procedures? Do these policies and procedures provide guidance on the situation? Can you discuss the ethical conflict issue within the organisation such as: Immediate superior Next level of management A corporate governance body Other departments in the organisation

Does your organisation have a whistleblowing procedure? Should you seek guidance from external sources such as the Institutes Technical Ethical Enquiry Service or CARE?

6.

Alternative Course of Action You should also consider the following: The organisations policies and procedures; Applicable laws and regulations; Universal values and principles adopted by society; Consequences.

You should test the adequacy of your proposed course of action by considering the following: 7. Have all the consequences associated with the proposed courses of action been discussed and evaluated? Is there any reason why the proposed course of action will not stand the test of time? Would a similar course of action be undertaken in a similar situation? Would the suggested course of action stand scrutiny from peers, friends and family?

Finally When faced with an ethical decision it may be in your best interests to record your thought processes, discussions and any decisions taken. These records may be needed to support your course of action.

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APPENDIX 1 Framework for Ethical Decision Making Flowchart

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Are any relationships, services or circumstances amongst general prohibitions?

YES

Decline or discontinue engagement/assignment

NO

Identify and document threats

NO NO
Are threats significant?

Document insignificance

Identify and document possible safeguards

Proceed with Engagement

Do safeguards eliminate or reduce threats to an acceptable level?

YES

Document nature of engagement and how safeguards eliminate threats or reduce them to an acceptable level

NO
Decline or discontinue engagement/assignment

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