Page 3: ACCA and standards
As a global organisation and the largest international accounting body ACCA's mission is to:
"provide professional opportunities for its full members and student members pursuing qualification".
In doing so it aims to be:
"a leader of the global accountancy profession".
At the heart of this is the need to promote the highest ethical and governance standards, and to work in the public interest. Governance standards are at the heart of the accountancy profession. This is because accounting information is vital to a range of different users to make financial decisions. If this information has been prepared or presented in inconsistent ways, any decisions taken may be ill-advised and inappropriate with potentially damaging consequences.
In recent years the corporate world has been shaken by the accounting irregularities associated with Enron and WorldCom. Both cases highlighted the need to constantly monitor and develop accounting standards. First, there is a need to create robust internationally recognised procedures. Then there is a need to ensure that every accountant follows them.
In the cases of Enron and WorldCom, accountants and consultants were criticised for not carrying out their professional duties properly. Since these scandals, ACCA has played a major role in advising governments and regulators across the world on how to improve accounting regulation. The need for common accounting standards was first identified in the late 1960s. In 1970 the first Statement of Standard Accounting Practice (SSAP) was introduced. This was done to prevent accountants from using diverse accounting procedures that caused confusion and meant that accounts from different organisations could not be compared on a like-for-like basis.
In recent years the International Accounting Standards Board (IASB) has been introduced to provide a more independent process for setting International Financial Reporting Standards (IFRS). These accounting standards define best practice for all financial statements, and ACCA was the first body to base its syllabus on international standards.
As well as accounting standards produced by the IASB, ACCA also has its own code of ethics for its members. The fundamental principles of this code require ACCA members to:
- behave with integrity in all professional, business and personal financial relationships
- strive for objectivity in all professional and business judgements
- only accept or perform work which they are competent to undertake
- carry out their professional work with due skill, care and diligence and with proper regard for the technical and professional standards expected of them as members
- behave with courtesy and consideration towards anyone with whom they come into professional contact.
ACCA's code of ethics provides standards for its members to follow and reflects the expectations of any civilised society operating under the rule of law. Applying the code also enables stakeholders to understand the performance of an organisation, based upon the fairest and most truthful portrayal of its affairs.