Syllabus Edition
First teaching 2025
First exams 2027
Ethical Framework (Cambridge (CIE) IGCSE Accounting): Revision Note
Exam code: 0452 & 0985
Ethical framework
What is the ethical framework in accounting?
The ethical framework sets out the fundamental principles of how people working in accounting roles must behave
The principles of professional ethics apply to all roles and functions related to accounting
Payroll
Reporting
Auditing
Bookkeeping
Accountants
Financial statements
What are the five principles of the ethical framework?
There are five principles of professional ethics
Principle | Explanation | Example |
|---|---|---|
Integrity |
| An accountant cannot agree to withhold information from the financial statements so that the business looks better. |
Objectivity |
| An accountant cannot produce financial statements for a relative. |
Professional competence and due care |
| An accountant should know the most recent terminology and accounting practices. |
Confidentiality |
| An accountant cannot share information about wages with the employees of a business. |
Professional behaviour |
| An accountant must be truthful about their qualifications when advertising their services. |
Why is it important to apply the ethical framework?
The framework enables stakeholders to have trust and confidence in the work performed by accountants
The framework makes sure that the reputation of the profession is maintained
The framework allows stakeholders to make informed and valid decisions
There can be severe consequences if professional ethics are not followed
Unethical practices can damage an accountant's reputation
Businesses will refuse to hire accountants if they are unethical
There can be legal repercussions for unethical practices, such as fines or, in serious cases, imprisonment
Examiner Tips and Tricks
This topic could come up on Paper 1 as a multiple-choice question. Make sure you know the difference between the five fundamental principles.
On a Paper 2 question, you might be required to explain why the ethical framework is important. Make sure you give one reason for each mark available.
Worked Example
Identify the principle of professional ethics being described.
"Accountants must not share private information of a business with its competitors".
A | Integrity |
B | Objectivity |
C | Confidentiality |
D | Professional competence and due care |
Answer:
The correct answer is C, confidentiality.
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