Professional Ethics Accounting And Finance Sector


Ethics can be defined as specific principles which govern an individual's behaviour to work in professional manner. Code of ethics can be determined in terms of professional values that incorporates principles and standards within a corporations. One of the main key traits of individuals is adherence to a strict set of ethical guidelines (Hannafey and Vitulano, 2013). The present report focuses on this concept which entails principles of ethical working, role of professional bodies in accounting and finance sector as well as its role in promoting sustainability. For this process, Barclays has been taken which is a British multinational investment bank, situated in London. It is considered as one of the largest organisation in banking sector which operate business on specific code of ethics.

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Task 1

1.1 Principles of ethical behaviour

Code of ethics referred as main aspects to control behaviour of professionals who are associated with an organisation. In context with people working in finance and accounting sector, they must comply with five main key fundamental principles as given below:-

  • Integrity: It states that accountants must be forthright and candid with financial information of business clients. They should work within restriction or limitation while using confidential information as well as avoid intentional opportunity to manipulate the same.
  • Objectivity: Professionals in finance sector especially auditors must avoid conflicts of interest as failure to remain independent and objective sometime hamper their status and quo. Therefore, they must follow ethical values of objectivity and independence.
  • Professional and technical competence and due care: It assists professionals to exercise ethical or technical accounting standards as well as understanding information as well.
  • Confidentiality: Professionals must keep financial and personal information of clients and business in confidential manner. They should not disclose such kind of data to third party without permission and specific authority.
  • Professional behaviour: They must follow rules and regulation as per professional or ethical standards and avoid actions which discredit their duties.

1.2 Legal, regulatory and ethical requirements that affect accounting and finance sector

There are various factors present in business environment which affect the legal obligations of accounting and finance sector:

  • The Law: It includes both civil and criminal law which states that certain activities of business are acceptable as minimum standard but viewed as unethical also. For example: Formulate policies to minimise the taxation on bill is considered as legal activity but in terms of ethical standard, it is not considered as right as well.
  • Compliance: Failure to comply business policies with set rules and regulations can lead a business to face legal charges. In addition to this, government may take strict actions against such companies as well. Therefore, professional deal in finance sector must concern with compliances set by regulatory bodies so that business can be prevented from unfair competition.
  • Code of practice: Every organisation has set some specific set of ethical code of practices which incorporate with professional values and principles. Therefore, accountants of Barclays have followed written code of practice which are enforced by disciplinary actions.

1.3 Role of professional bodies in relation to accounting and finance sector

In accounting and finance sector, every organisation used to set ethical guidelines either in written or unwritten form (Hannafey and Vitulano, 2013). The main role of each professional working in finance and accounting sector to understand the certain code of ethics and should avoid conflict of interest. It includes Code of Conduct and Ethics for Employees, Discharge for Cause, Financial Disclosure, Treatment of Confidential and Proprietary Information etc. In case of discrepancy where professional finds itself with an apparent or actual conflict of interest, they must disclose it to the Audit Committee with all necessary documentation. Further, committee members will examine how such reported violation could be resolved.

1.4 Reason about expectation to operate business within code of conduct and practice

Ethics are generally concerned with the way that a professional should behave in a certain situation. This will entail what is right or wrong thing that ultimately leads to morality. In context with code of practices, it includes standards of conduct that are expected from individuals or organisations to operate business within set rules. The main reasons behind expectation to work within code of practices are:-

  • To protect the integrity of organisation or industry sectors.
  • To encourage for diversity and equal opportunity within all levels of employment.
  • To support social, political and economical integrity by individuals where they operate their businesses.

Thus, code illustrates core professional behaviours and values which underpins the most common encountered ethical consideration.

1.5 Risk of improper practice within an organisation and importance of vigilance

Conduct business in unethical manner leads to generate various kinds of risks. It damages reputation of organisation or individuals and may leads to consequence of operational failures. Operational risks in finance sector like Barclays can be categorised into two main components that are:

  • Internal Fraud: Intentionally seek confidential finance information of clients, tax evasion etc.
  • External Fraud:  Data usage or theft by third party, hacking and more.

In this regard, financial professionals are needed to keep an eye on some aspects which may leads to rise occurrence of such operational risks (Harfield, 2012). It includes money laundering, terrorists financing, due diligence etc. Banks should monitor customer's transaction, their business activities, ownership structure etc. Finance management should obtain information about customer's risk profile through their due diligence processes. It includes source of funds and wealth, purpose of opening an account, banking references, financial statements etc.

The term vigilance states that keeping an eye on certain activities of professional and take actions accordingly, to promote fair practices. It assists individuals to concern on practices for ensuring integrity in official behaviour and operations. Therefore, vigilance is considered as an essential for every individual or organisation where rules and regulations are complex, accountability is low, professionals have discretionary powers and they found to be corrupted. Thus vigilance helps in setting up organisational policies as per governance system to identify unethical practices and level of corruption.

1.6 Opportunities for maintaining an up-to-date knowledge of changes to codes of practice, regulation and legislation which affect accounting and finance sector

Keeping up-to-date with code of practices and legislations seems to be much difficult and time consuming process. But it is vital for every organisation like Barclays which deal in finance sector, to keep pace with changing rules. It will provide various benefits like- businesses can be modified with changes and take consequential actions to stay compliant. Making alteration in code of conduct will help in earning the trust of employers as well. Under this condition, Barclays will become able to take better decisions in favour of business and employees. This will lead to win a competitive edge and add business value by reducing insurance premium.

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Task 2

2.1 Way to work ethically

Ethics are considered as set of rules which states how to behave or conduct business ethically. It defines what is right and wrong for a professional or organisation. For being a professional, a person should give respect to colleagues. They should treat employees with dignity and equality (Stappenbelt, 2013). In context with customers, organisations must ensure that whatever services they are providing must accessible to all. Apart from this, it is also essential for employers of Barclays to provide healthy and safe working environment to employees, visitors and all associated people. Professionals should concern that on code of practices also to avoid unfair wage, exploitation of child labour or any other violation of labour's rights.

2.2 Importance of objectivity and maintaining a professional distance between professional responsibilities and personal life

Maintaining professional and personal boundaries are considered as essential part of work. It keeps individuals from risk of allegation which terms as a key of professional priority. It shapes their relationship with colleagues, family members and other associated people (Forster, 2012). In general professional boundaries can be defined as limitations which state individual to be friendly while working with others but not friend. It reduces the chance of being fatigue in workplace as well. In general professional life focuses on completing own desires for socialisation. While professional responsibilities relate with a purpose to meet demand of business and fulfil client's requirement. Therefore, keeping a distance between profession responsibilities and personal life, helps in reducing the chance of conflict of interest at work.

2.3 Importance of adhering to organisational and professional values, code of ethics and regulations

In general, three main components are there, which form the foundation of trust viz. Ethics; Values and Laws. In this regard, ethics refers to sense of conducting business in right manner. While values concerns on three main aspects that are morale, integrity and character. Thus, both values and ethics create worth of trust and respect  as well as promote sustainability in business. Similarly, laws and legislations provide a sense of right to create certain code of ethics. Thus, professional code of ethics will set a standard within an organisation. This would help in preventing business from illegal and unethical activities to meed demand of customers. It will also help in safeguarding ethics, increased productivity and teamwork among employees, cultivating a strong brand image etc.

2.4 Importance of adhering to organisational policies to handle clients' money

Clients or customers are considered as the king in consumer marketplace. Therefore, keep customer happy and gain their high satisfaction is the main of Barclays as commercial success of its business is highly depended on them. Code of ethics is concerned on what should have to applied within company's policies and procedures. Since Barclays Bank is listed on London Stock Exchange therefore, it comply business with Corporate Governance Code of UK (Prakasha and Jayamma, 2012). The Chartered Banker Professional Standards Board has set out professional behaviour which are expected to be followed by financiers and auditors of this bank especially. They should build trust with business clients and partners, collaborate proactively with customers across all of Barclays to obtain best result. In order to handle client's money, this bank has set policies where financial professionals must act in ethical manner. Financiers should handle apparent or actual conflicts of interest between professional and personal relationships. Along with this, accountant professionals are strictly prohibited from taking such actions which mislead internal and external auditors for rendering the financial statements.

2.5 Situations where confidential information needs to be disclosed

Disclosure of confidential information in front of third party is strictly prohibited by law (Robison, Pritchard and Ellin, 2012). But in certain conditions like an customer found to be associated with money-laundering, terrorists financing or due-diligence, then professional accountants of Barclays have right to disclose such information in compliance with legal authorities. Any client when found suspected in money laundering then under the Terrorism Act 2006 and Money Laundering Regulation 2007, it is a criminal offence. Therefore, it is an essential duty of auditors to disclose confidential information to legal authorities. This would help in reducing occurrence of adverse affect of criminal activities which may impact on business reputation in negative manner as well.

2.6 Importance of working within limits and confines of own professional experience, knowledge and expertise

Working within own limit states an individuals to clearly understand responsibilities of own and way to carry out the same. They should identify current skill gap in regular manner while working in an organisation (Cheng, 2012). This would help in determining the requirement of development plan so that an individual can exceed their professional abilities. When a person outlines own limitation then and confines own knowledge and expertise then it will help in performing assigned duties more appropriately. It also assists individuals to behave in professional manner at workplace with colleagues. By behaving in friendly manner but not become friends with other workers, helps a person in maintaining own dignity and respect in eyes of them.

Task 3

3.1 Authorities and internal departments where suspected illegal acts or other malpractice are reported

A system whereby suspected illegal and malpractice should be reported, gives an organisation an important tool to take actions against such situations (Mohajeran, 2014). Since every professional who is working in an organisation are mostly expected to display loyalty and discretion towards business. Therefore, under such situation when they find suspicious activities in business then it arise confusion and difficulties in front of them to reveal the same or not. In this regard, it is believed that corporations must establish guidelines whereby employees feel able to report malpractice and any illegal kind of activities to related authorisers. In context with Barclays, this bank believes that sloppiness in suspected malpractice, may create a huge loss both for employees and business's concerned. Therefore, to deal with such situations, its employers have provided a clear guidelines to employees and give proper information about Fraud and Money-laundering officer.

3.2 Action to take in instances when requests for work are beyond the employee’s competence

Suspected malpractice, illegal and ethical activities when found in a company then it majorly destroys its reputation at marketplace (Hannafey and Vitulano, 2013). Thus, in this regard, it is necessary for organisations to establish a clear guidelines which entail workers where they can be disclosed such information before reporting to external agency. For this process, it is important for Barclays to treat such complaints of suspected malpractice and unethical activities with due care.  It can be established by drawing up a proper reporting procedure. It includes a certain code of standard  that revealing such information by employees to internal departments will not impact on their job role. Along with this, through clearly defined reporting procedure about malpractice, make ensure to employees that their complaints will report to right corporate officer. They will further take necessary actions to resolve such major issues.

3.3 How to report inappropriate behaviour of client

Inappropriate behaviour of clients can be stated in terms of aggressive or abusive behaviour, spreading malicious rumours about business or employees, offensive comment or unwanted physical contact, isolation and more. Therefore, any employee when found itself under such condition then they can report the suspected malpractice to higher authority within company. These authorisers are held accountable for resolving such alleged malpractices.

Method of reporting: Employees who face inappropriate behaviour of clients are required to review the company's handbook first. This would help in determining if such kind of behaviour they observed is prohibited or not. For this process, management of Barclays used to conduct private meeting with employees on regular basis to discuss with them about such activities. In this process, workers are needed to carry documentation about suspicious activities so that necessary actions can be taken.

3.4 Internal and external procedures to be followed for stopping illegal and unethical practices

In order to stop illegal and unethical practices, an individual can adopt the concept of Whistle-blowing (Harfield, 2012). It can be defined as code of conduct under which an employee or whistle-blower can discloses unethical or suspected activities to external parties. Such process can brought a financial loss or other kind of damages for a company where such kind of activities have happened. Therefore, a whistle-blower's relationship with colleagues may lead to dismissals or other form of disadvantages. But it will help in stopping malpractice or unethical activities also where internal departments of a company fails to take appropriate actions.

3.5 Strategies used to prevent ethical conflicts

Without ethics within a business, an organisation's internal processes as well as external dealing could not be handled in desired manner (Stappenbelt, 2013). Generally an ethical conflict occurs at workplace when decision made by other workers are observed as unethical. Therefore, to prevent  ethical conflicts, management of Barclays have adopted a two-sided approach. It includes provide training to workers and educate them about ethical conflicts. While second one is to give recruitment to effective leaders who influence people to make effective decisions that hold ethics.

Task 4

4.1 Importance of an ethical approach to sustainability

Sustainability refers to an important concept within business which has to be achieved by introducing ethical approach. It states business to concern on three main aspects that are economical behaviour, social equity and ecological health. While establishing code of ethics, it is necessary for organisations to concern on benefits of employees, employers, customers and all stakeholders. This would help in getting support of stakeholders in running business successfully in ethical manner. By setting clear guidelines, employees can perform their roles and responsibilities more appropriately.

4.2 Responsibilities of finance professionals in upholding the principles of sustainability

Professionals dealing in finance sectors perform various responsibilities in upholding the principles of sustainability. It includes creating and promoting an ethical-based culture which reducing illegal activities (Sadowski and Thomas, 2012). Financiers must raise awareness of social responsibilities by investing adequate amount of funds in CSR activities. They are also required to promote sustainable practices by treating employees equally with respect and dignity.


It has concluded from this assignment to run business successfully, it is necessary for every organisation to establish specific code of ethics. By setting certain rules and regulation, a company can give safe working environment to workers. Apart from this, code of conduct and ethics also give authority to employees to reveal information about suspicious activities to internal and external agencies.


  • Sadowski, S. T. and Thomas, J. R., 2012. Toward a convergence of global ethics standards: A model from the professional field of accountancy. International Journal of Business and Social Science. 3(9).
  • Stappenbelt, B., 2013. Ethics in engineering: student perceptions and their professional identity. JOTSE: Journal of technology and science education. 3(1). pp.3-10.
  • Harfield, C., 2012. Police informers and professional ethics. Criminal Justice Ethics. 31(2). pp.73-95.
  • Hannafey, F. T. and Vitulano, L. A., 2013. Ethics and executive coaching: An agency theory approach. Journal of Business Ethics. 115(3). pp.599-603.
  • Mohajeran, B., 2014. Structural modeling of relationship between professional ethics and spirituality at work with social responsibility among nurses in the public hospitals in Kermanshah city. Quarterly Journal of Nursing Management. 3(2). pp.20-29.
  • Cheng, Y., 2012. Further discussion on the construction of ethics of professional accountants. International Journal of Business Administration. 3(3). p.28.
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