IFAC proposes ethics upgrade.
Disclosure vs. confidentiality
According to the proposal, there are times when professional, legal or other requirements may override the need for confidentiality. The revisions provide guidance to accountants who have determined they should disclose information that otherwise would be considered confidential. "This draft focuses on the sensitive nature of such situations," said John W. Gruner, IFAC director general. "It is not always easy to determine when or when not to disclose confidential information."
The ED also covers guidance for accountants who employ the services of nonaccountants. Because increasingly accounting firms are being called on to do nontraditional accounting work, they often employ the services of other professionals, such as lawyers, actuaries and valuers. According to the proposal, regardless of who actually performs a service for a client, the accountant must take ultimate responsibility. Therefore, the ED emphasizes that accountants must communicate to nonaccountants their basic ethical requirements by asking them to read the appropriate ethical code sections and to request consultation when potential conflicts arise.
Use the code!
The ED reinforces the concept of the IFAC code as a model on which national guidance should be based. "We always have had a paragraph in the front cover of the ethics code about the applicability of the international code of ethics as national requirements," said Gruner. "We added this language to the code itself to emphasize that no matter how diverse various regulatory regimes are, certain basics of the IFAC ethics code have to be adhered to."
The ED also amends the IFAC Statement of Policy on Implementation and Enforcement of Ethical Requirements, including recommendations that professional accounting institutes provide support, and help lines, for individual accountants on ethics issues.
Free copies of the exposure draft are available by calling the IFAC in New York at 212-302-5952. The ED also is on the IFAC Web site at http:// www.ifac. org.
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|Title Annotation:||International Federation of Accountants|
|Publication:||Journal of Accountancy|
|Article Type:||Brief Article|
|Date:||Jun 1, 1997|
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