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  3. It is mentioned in “Accountanct and accountacy profession” lecture that confidentiality is one of the fundamental principles of accounants’ code of ethics. You mentioned that accontants are not watchdogs nor detectives.
    In the present lecture “Internal control and implication of fraud”, my understanding is that suspicion of money laundering has to be reported by accountants to authorities and procrastinatiing in doing so might be interpreted as tipping off. So, my question is to which extent accountants should break confidentiality? Is money landering the only case they ought to do so? Or do thay rely on their good and fair judgment?
    Kind regards

    • If there is a legal requirement to report information then accountants must comply with that legal duty. Money laundering is such a case. Law overrides professional ethics.

      The other times that accountants can release client information are:

      1 With client’s consent
      2 Where there is a legal right (eg defending oneself in court)
      3 Where it is in the public interest.

      Public interest is not defined in law and legal advice is needed to see if that hurdle is crossed. So, if a company breached a small administrative regulation, the public interest condition would not be met. If accountants saw that a client was endangering members of the public (eg an airline not complying with maintenance schedules) it would probably be in the public interest to notify the authorities (but guidance should be sought).

    • They have to break confidentiality if there is a legal requirement to do so – as there is in money laundering. In most other cases there is no such duty, though they can break confidentiality if that is in the public interest. ‘Public interest’ is not well-defined and accountants should get advice from their professional body and lawyers. For example, if you discovered that your client, a pharmaceutical company, was concealing serious side effects caused by one of their drugs, it is probably in the public interest to inform the authorities. If you found they were paying below the minimum wage, it probably wouldn’t be. If the company does not mend its ways when told about non-compliance, the auditors should resign: the directors are too dishonest to work with,

  6. A question?
    If a customer pays cash, who is on credit terms, and the only reason he does do is to avoid it showing on his books, subsequently payment is received and he receives credit note. Instead of receipt? Fraud?

    • In law, fraud is deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. i think avoid it showing on the reports makes no good for the buyers.so it is not a fraud unless the goods bought are for his own sake. what’s more,expense is matched to income,if the cash becomes smaller,the expense becomes larger which can easily be discovered,so it is not smart to do so.

  7. I will start taking my first paper this comming december, so it means i must cover all books from f1 up to f3 or only f1. someone tell me please so that i can manage my time.

  8. I will start taking my first paper this comming december, so that means i must cover all books from f1 up to f3 or only f1. someone tell me please so that i can manage my time.

  10. They are the same, using slightly different words.

    Motivation = incentive (eg to pay your rent)
    Attitude = dishonesty.

    You could have opportunity and motivation to steal cash, but it requires a dishonest attitude before you would actually do it.

  11. In the BPP study text the fraud requirements are stated as Dishonesty,Motivation and Opportunity.
    Whereas , in the the lectures it is being given as Incentive,Opportunity and Attitude.
    Which is the correct one?

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