Deputy Chair, International Ethics Standards Board for Accountants

Transcription

1 Chair, Wui San Kwok Deputy Chair, International Ethics Standards Board for Accountants Chairman, the Ethics Committee of the Institute of Singapore Chartered Accountants(ISCA) Contributed to the drafting of Singapore's current Code of Professional Conduct and Ethics for Public Accountants Partner, PricewaterhouseCoopers LLP

2 Asian Culture Ethical dilemmas in implementing Global Ethics Standards? Wui San Kwok Deputy Chair International Ethics Standards Board for Accountants(IESBA) 2

3 Introductory Remarks 3

4 Evolving face of ethics standards Evolving Process Self-determined Evolving Nature Principles Professiondetermined More Rules Regulators & public interest influence Global influence, consistency 4

5 Cultural differences can create ethical dilemmas 5

6 Compare and contrast 6

7 SPEAKERS AND TOPICS Wui San Kwok - Introductory remarks Atsushi Kato - Japan experience Limin Zhang - China experience Jackie Poirier - Canada experience & CAPA Guidance Questions 7

8 Challenges in implementing global ethics standards in Japan by recognizing cultural and business practice differences Atsushi Kato Board Member International Ethics Standards Board for Accountants (IESBA) 8

9 CONTENTS 01. Challenges in implementing global ethics standards in Japan 02. Cultural and business practice differences 03. How do we respond to ethical dilemmas and conflict? 04. How shall we respond to a coming new standard Responding to Non- Compliance with Laws and Regulations (NOCLAR) in Japan? 9

10 Challenges in implementing global ethics standards in Japan IFAC members shall not apply less stringent standards than the Code Japan has adopted IESBA Code of Ethics with the following differences: More restrictive provisions than IESBA Code - Referral Fees - Gifts and Hospitality Additional provisions to JICPA Code of Professional Ethics - Mutual Conference between Members - Prohibited Conduct against Other Members - Maintenance of Quality - Prohibition of Name Lending - Expression of Opinions Regarding Future Events 10

11 Cultural and business practice differences The above differences reflect the Japanese cultural and business practice differences: PAPP shall not receive nor pay a referral fee relating to introduction of an assurance service (i.e. Conceptual framework approach is not applied.) Not only receiving gifts and hospitality, but also making an offer is prohibited, in case of PAPP Prohibition of professional name lending to others in connection with proving professional services 11

12 How do we respond to ethical dilemmas and conflict? Meaning of commitment to act in the public interest Very vague meaning Not representing views of nominating organization or own jurisdiction Equally applied throughout the word? Diversity of Ethical Norms Culture of the organization, the industry and the country may have on different ethical norms Application of the conceptual framework approach Difficult situation in practice What is the robustness of specific safeguard? 12

13 How shall we respond to proposed standard Responding to Non-Compliance with Laws and Regulations (NOCLAR) in Japan? Difficult situation to respond to the NOCLAR in Japan Most of PP are engaged in audit already applying ISA 250 Difficult to respond to very wide scope of NOCLAR by auditors Unique in Japan, number of PAIB are very small Not yet popular to use an internal whistle- blowing mechanism How shall we globalize to meet with international standards such as NOCLAR in Japan? 13

14 Reinforcement of Professional Ethics: Reputation-oriented approaches Limin Zhang Accounting Professor, School of Management and Economics Beijing Jiaotong University, Beijing, China

15 CONTENTS Key factor: culture Crisis of public confidence Measures aim at individual accountant Future challenges

16 The Cultural Challenge Powerful, pervasive influence on behavior Positive AND Negative Service Convergence Guanxi Focus Man Conventions Serve Earth, the good Public & Codes at birth Ethical Serve Virtue Clients Ethics stance Commercialism (profit) v Professionalism (virtue ethics)

17 Crisis of public confidence Negative consequences of the accounting culture Power-distance ratio Collective accountability Preference for statutory control 4 Ambiguity

18 Measures aimed at individuals Nation-wide rating of professional integrity Identify and cultivate talent Mission Accountability Public interest Reputation Individual accountability for audit reports Encourage outstanding CPAs to become involved in public affairs

19 Effectiveness of the Measures Mandatory rotation effects: individual better than firm Individual Reputation Smarter switching individual CPA of low audit quality Stronger motivation of auditor-in-charge to improve audit quality Better clients selected by CPA leading talents

20 Future Challenges Different institutional environment v universal principles Too much responsibility if adopt NOCLAR? Growing demand for Non-Audit service v audit independence Impair public confidence?

21 Accounting Profession in Canada CAPA Guidance Jackie Poirier Deputy President CAPA (Canada) 21

22 CONTENTS 01. Accounting Profession in Canada 02. CAPA Guidance 22

23 Accounting Profession in Canada 100+ years of history in serving the public interest Undergoing significant transformation to the Chartered Professional Accountant (CPA) profession Committed to fostering public confidence through various activities Recent Forum on Educating Professionals Ethics and Judgment in a changing environment 23

24 CAPA Guidance 8 Key Elements of Public Sector Financial Management Success: Climate for reform Governance-Legal and Institutional framework Governance-Values System 24

25 CAPA Guidance Maturity Model for the Development of Professional Accounting Organizations (PAOs) Definition of profession 3 of the 16 Key Success Areas: Public Interest Ethics Investigation and discipline 25

26 Asian Culture Ethical dilemma in implementing global ethics standards Questions 26