Ethical Considerations, Technology & Sustainability (Cambridge (CIE) IGCSE Accounting): Flashcards
Exam code: 0452 & 0985
1/240Still learning
Know0
- FrontEthical Framework
Define the ethical framework.
Was this flashcard helpful?
Cards in this collection (24)
Define the ethical framework.
The ethical framework sets out the fundamental principles governing how people in accounting roles must behave.
It applies to every accounting function, from bookkeeping and payroll through to reporting and auditing.
What are the five principles of professional ethics?
The five principles are:
integrity
objectivity
professional competence and due care
confidentiality
professional behaviour
An accountant is asked to leave information out of the financial statements so the business looks better. Which principle would that break?
Integrity.
Accountants must be honest, straightforward and trustworthy, which rules out presenting a picture they know to be incomplete.
Why can an accountant not prepare financial statements for a relative?
Objectivity.
Accountants must be fair, free from bias and able to make their own judgements, so they must not work where there is a conflict of interest.
An accountant tells a business's employees what their colleagues are paid. Which principle has been broken?
Confidentiality.
Information must not be shared without the business's permission unless the law requires it, and must not be used for anything other than the accounting work.
Complete the sentence about one of the five principles:
Professional competence and due care requires an accountant to be suitably
and to keep with changes to international accounting practice.The completed sentence is:
Professional competence and due care requires an accountant to be suitably qualified and to keep up to date with changes to international accounting practice.
Why does the ethical framework matter?
It lets stakeholders trust the work accountants do, and so make informed and valid decisions.
It also protects the reputation of the profession as a whole.
True or False?
Breaking the ethical framework can lead to imprisonment.
True.
Unethical practice damages an accountant's reputation and costs them work, and in serious cases there are legal consequences including fines or imprisonment.
What are the two kinds of digital system used in accounting?
Accounting software, used for the sales, purchases and general ledger accounts and the cash books.
Spreadsheets, used for financial statements, cash flow statements, forecasts and budgets.
Which businesses still use manual accounting systems?
Very small businesses, and those that have operated at a modest level for a long time.
Their records are physical journals and ledgers rather than software.
How does a digital accounting system reduce errors?
The software does the calculations, which removes human arithmetic errors.
Figures also update automatically whenever a value is changed, so the information stays up to date.
What are the benefits of storing accounting information electronically?
No physical storage space is needed, and the information is easier to share with other people.
It can also be backed up in case it is lost.
Complete the sentence about a benefit of a digital system:
Financial statements can be produced
, which helps managers with .The completed sentence is:
Financial statements can be produced instantly, which helps managers with decision-making.
True or False?
Moving to a digital accounting system removes the security risk that comes with paper records.
False.
The risk changes rather than disappears. Data can be hacked just as physical documents can be stolen.
What are the drawbacks of moving to a digital accounting system?
Computers and software cost money, both to install and by subscription.
Staff have to be trained, which adds to expenses, and the data carries its own security risks.
What are the four types of storage system?
The four types are:
manual, in physical files, folders and cabinets
data storage devices, such as USBs, hard drives and local servers
cloud services, stored online and reached through an account
other digital services, meaning subscription accounting platforms
What are the advantages and drawbacks of storing records manually?
They need no technology, are simple to understand and cannot be hacked.
But they take up physical space, are slow to search, are harder to back up, and can be lost, damaged or stolen.
What does cloud storage offer that a hard drive does not?
Access from anywhere, easy sharing, automatic backup, and capacity that can be increased as the business grows.
It also reduces the need for physical storage space and servers on the premises.
True or False?
Moving to cloud storage frees a business from depending on anyone else.
False.
Access depends on the service provider and on having an internet connection, and there are ongoing subscription costs. It swaps one dependence for another.
Why must a business store its data securely?
Because data can be lost, through accidental deletion, a forgotten save or a technical fault.
Confidential information can also be shared by mistake, or accessed by others through guessed passwords or hacking.
How can a business make its digital records more secure?
Install firewalls and antivirus software, use secure passwords, and back the data up to an external drive or the cloud.
Data can also be encrypted, screens locked when unattended, and computers wiped before they are disposed of.
Complete the sentence about manual records:
Manual records are kept secure by storing them in a
room or cupboard, and are disposed of using a or a confidential waste company.The completed sentence is:
Manual records are kept secure by storing them in a locked room or cupboard, and are disposed of using a shredder or a confidential waste company.
Complete the sentence about storing data sustainably:
Data should only be kept for
, and should be organised so that there is no need to it.The completed sentence is:
Data should only be kept for as long as it is needed, and should be organised so that there is no need to reproduce it.
How does storing data sustainably differ from storing it securely?
Sustainability is about reducing energy use and waste: keeping only what is needed and disposing of it responsibly.
Security is about stopping data being lost, shared by mistake, or accessed by the wrong people.
Sign up to unlock flashcards
or