Chapter-9: The Pofessional Accountant

Accounting Profession Pinciple + Standard Professional Accountant

① Comcept ① Professional Principles ① Role

1.1 Definition: Fundamental Principles set by IFAC Code of Ethics Professional Accountant work in:
1. Professional = Having skill, technical compatence, IFAC Code of Ethics: 1.1 Public Practice
professional values.
2. Accountancy = Comprises of measurement, preparation, Integrity: Being straightorward, honest, fair and truthgulness. Invplve in accountancy firm for practicing many service
validation, disclosure, auditing, assurance provision, and Objectivity: don't allow bias, conflict of interest, undue Need technical competence + Professionally responsible
advisory service on Ginancial information. influence of others Specific qualiigication needed for Statutory audit service
3. Accountancy Profession = concerned with measurement,
assurance provision, about Financial information that help
ficision makers make resource allocation decisions. Professional competence and due care: Maintain professional
4. Financial reporting (Heart of Accounting Profession) = knowlefege and skill at highest level + act diligently in Statutory Audit: Expression on opinion as to whether FSs have
Provision of Financial information about entity to rxternal users accordance with applicavle technical and professional been prepared in all material respects with applicable financial
usegul to make dicisions standards. reporting framework anf therevy give a true and fair view.
5. Assurance (Heart of Accounting Profession) = Expression an Confidentiality: Keep information confidential + take The Company Act 1994 sets:
opinion or conclusion by professional accountant designed to responsible steps to preserve conifentiality. →Who is eligible for statutory aufit?
enhance confidence of intended users.
Professional Behaviour: Comply with laws and regulations, Appointee must be:
avoid any action that discredits his profession. a) Independent
Threats to prefessional principles: b) Sole practitioner, partbership or corporate body
Self-interest: Financial/ other interest. c) Eligible for appoinment under bofy rules
② Importance Self-review:Re-evaluated own previous judgement. →Who is not eligible for statutory aufit?
For supporting: Advocacy: Bojectivity may be compromise. If person:
1. Effective working of capital market Familiarity: Fue to close relationship, too sympathetic to a) does not meet eligible criteria
Accounting pofession ensures organisation's sufficient fund. interest. b) is officer/employee of the company
Capital Market can operate effectively if: a. adequate info b.
not asymmetric info. Professional accountant supports that Intimidation: Deferred form acting objectively due to threats, c) is partner, or in the employment of an oficer
through accurate reporting and assurance actual or perceived. d) in indebted to he company > 1,000 taka
Safeguard against Threats: Safeguarf created by a)profession, e) is a director/ shareholder holding 5% of share capital
2. Public Interest legislation, regulation b) in the work environment. 1.2 Business
Public confidence on professional's expetise and integrity ② Accounting principles →Involved in Financial function of a company as employee
③ Professional Responsibility 1. Accrual basis →No Need technical competence
1. Trust and ethical Behaviour 2. Going concern Note: Professional competence and due care required to
2. Code of Ethics: Conceptual Framework 3. Double entry bookkeeping maintain
a) Compliance based approach (Eule based) 4. Faithful representation: Accuracy and completeness
b) Ethics based approach (Framework based) 5. Substance over form ②Limits of responsibiliries
3. Regulation of accountancy profession 6. Materiality a) Legal matters deal with qualified lawyer
④ Technical competence 7. Neutrality b) Certain administrative matters (Task of secretary)
a) ICAB's entry and educational requirement 8. Prudence c) Claiming against insurance policies
b) Continuing membership of ICAB 9. Timeliness d) Dealing with pension funds
c) Reserved area of practice 10. Cost versus benefit e) Property valuation
⑤ Work of Accountancy Profession 11. Consistancy f) Payroll function
a) Maintaining control and safeguarfing assets 12. Offsetting g) Procurement department
b) Financial Management ③ Accounting Standards h) Acquisition and use of IT
c) Financial Reporting 1. Purpose: To identify proper accounting practice
2. Types of Accounting Standards (In Bangladesh)
a) International Standards: IASs and IFRS produced by IASB and
adoptes by ICAB
B) Bangladesh Company Act 1994 and BSEC regulations