Sub-Decree On The Code of Ethics for Professional Accountants and Auditors

Transcription

1 Kingdom of Cambodia. Nation Relieion KinS The Royal Government No:83. ANKR.BK Unofficial translation Sub-Decree On The Code of Ethics for Professional Accountants and Auditors The Royal Govemment Seen the Constitution of the Kingdom of Cambodia; Seen tlre Royal Decree bl".nsirktl dated 15 July 2004 on the appointment of the Royal Government of Cambodia; Seen the Royal Kram No. 02ll.ls/94 dated 20 July 1994 prornulgating the Law on the Establislunent and Organization of the Council Ministers' Seen tire Royal Iftam No. NS IRKM/0196/18 dated24 January 1996 promulgating the Law on the Establishinent of the Ministry of Economy and Finance' Seen the Royal Kram No. NS /RKM/ dated 8 July 2002 prornr,rlgating the Law on Corporate Accounts. Seen the Aukiet No. 04 ANKR/BK dated 20 January 2000 on the organizatjon and functioning of the Ministry of Economy and Finance' Seen the Anukret No. 78 ANKRIBK dated 18 November 2004 on the additional and changes some Departments of the Ministry of Economy and Finance. Seen the Anukret No,18 ANKR/BK dated 19 March 2003 on the Organisation and Functioning of the Karnpuchea lnstitute of Certified Public Accountants and Auditors; Seen tlre Anukret No.4IANKWBK dated 6 August 1997 on the application of the Law on General Statutes of the Public Enterprises; Obtai11ed the approval from the Council of Ministers in its plenary session dated..03 June 2005 Article 1: HEREBY DECIDES CHAPTER 1 GENERAL PROVISION TSis Code of Ethics aims to set out the provisions on the Code of Ethics for all professiorral acconntants and auditors and all categories of the members of Kampuchea Institute of Certified public Accountants and auditors (KICPAA) hereinafter called " Professional

2 Accountants.,. The development of this code of Ethics is based on the International code of Ethics for Professional Acc'ountants of the International Federation of Accountants The technical terms used in this sub-decree define as follows: A certified Public Accountant (cpa) means a person in public practice who has the usual profession to offer to his clients to which he is not bound by an employment contract, services in relation to: ' BookkeePing,. The aggregation of financial statements, ' Opening balances engagements, ' Closing balances engagements, ' The supervision of the accounts'. The review of financial statements, ' Adjusting entries in the books,. Rssessing and consolidating tlre accounts of companies and entities,. The organisation of accounting procedures and provide analysis' through accounting technique processes, on the statement of financial position and opelations of companies under their various economic, legal and financial aspects, and ' Report his findings, conclusions and suggestions' A statutory Auditor means the person who in his own name and under his own responsibility certifies. the true and fair presentation of the accounts of natural and legal persons which have entrusted him with this engagement as a result of regulatory provisions in force or a confactual agreement' No person shall exercise the profession of certifred public accountant and/or statutory auditor unless that person is registered on the list of certified public accountants and statutory auditors of the Institute of Certified Public Accountants and Auditors' Article 2: The rights provided thereto and obligation to be respected by the professiolal accountants practiced as professional independent or employed uy tl]-.-!9-mercial sector is defined in detail by the professionalcode of;ethics developed by the KICPAA' CHAPTER 2 PUBLIC N'{TEREST Article 3: A distinguishing mark of the accountancy profession isits acceptance of the res,po.nsibility to act in the public ilterest. Therefore, a professional accountant's responsibility is not exclusively to satisfy the needs of an individual client or employer'

3 Article 4: The public interest is considered to be the collective well-being of the community of people and institutions the professional accountant serves, including clients, lenders, govemtnents, employers, employees, investors, the business and financial community and others who rely on the work ofprofessional accountants CHAPTER 3 FUNDAMENTAL PRTNCIPLES Article 5: Tlie firndamental principles are integrity, objectivity, professional competence and due care, confidentiality and professional behavior. Article 6: PART 1 INTEGRTTY The principle of integrity imposes zur obligation on all professional accountants to be straightforward and honest in professional and business relationships. Integrity also implies fair dealing and truthfulness. Article 7: Professional accountants should not be associated with reports, returns, communications or other information where they believe that the information: Article 8: (a) Contains a materially false or misleading statement; (b) Contain statements or information furnished reckiessly; or f.1 Omits or obscures information required to be included where such omission or obscurity would be misleading. PART 2 OBJECTIVITY. The principle of objectivity imposes an obligation on all professional accountants that their professional or business judgmint should not be compromised by prejudice or bias, conflict of irrterest or tlie undue influence of others.

4 Article 9: professional accou'tants may be exposed to situations that may impair their objectivity' lt is impracticable to define ana pr"s"rite all such situations' Relationships that allow prejudice' bias or the undue influences of others to ou"rride professionaljudgment should be*avoided' Article 10: PART 3 PROFESSIONALCOMPETENCEANDDUECARE The principle of professional competence and due care imposes the following obligations on professional accountants: (1) To maintain professional.knowledge and skill at the ievel reqriired to ensure that clientsoremployersreceivecompetentprofessional,service;and (2) To act iir$"tl' in accordancl wittl appficable technical and professional standardsin"allprofessionalandbusinessrelationslrips' Article 11: Competent professional service requires the exercise of sound jurdgment in applying professioual knowledle. and skill in the performance of such service' Professional competence may be divided into two separate phases: (1) Attainment of professional competence; and iz> Maintenance of professional competence Article 12: The attailment of professional competence initially requires a higli standard general -of education, followed by specific education, training and examination in professionally relevant subjects and, if pr.r.rib.!, a period of wort.*p.ii"n.,' This should be the normal pattern of development for professional accountants. Professional accountants should also take steps to ensure that those working under their authority in a professional capacity have appropliate training. Article 13: The maintenance of professional competence requires a technical professional and business developments' continuing awareness of relevant Article 14: Diligence encompasses the responsibitity to act in accordancewith the requirements of an assiinrnent, carefully, thoroughly and on a timely basis'

5 Article$: PART 4 CO}{FIDE1{TIALITY OF PROFESSIONAL The principle of confidentiality imposes an obligation on professional accountants to refrain from: (1) Disclosing confidential information acquired as a result of professional and businessrelationslripswithoutproperandspecificauthorityorunlessthereisa legal or professional right or duty to disclose; and (2) Using confidential information acquired as a resuit of professional and business relat['ships to their personal advantage or the advantage of third parties' Article 16: professional accountants should maintain confidentiality even in a social envirorunettt, particutarly in circumstances where iong association with business associates or close or immecliate family relationships might result in their being less alert to the possibility that they may be inadvertently indiscreet. Article 17: professional accountantshould also maintain confidentiality regarding information disclosed by prospective clients or employers' Article 18: professio*al accountants should take all reasonable steps to ensure that staff under their control and persons from whom advice and assistance is obtained respect the duty of confidentiality. Article 19: The need to comply with the principie of confidentiality continues even after the end of relatio'slrips between professional accottntants and their clie.ts or employers' When professional accountants change employment or acquire new clients, they are entitled to use ihe experience gained in their previous activities' They should not' however' Llse or disclose any confidential information either acquired or received by thern as a result of a professional or business relationship. Article 20: The following are circumstances where professional accountants are required to disclose colrfidential information or when such disclosure may be appropriate: (1) Disclosure is permitted by law and is authorized by the client or the employer; izl Disclosure is required by law, for example:

6 (3) production of documents or other provision of evidence in the course of legal proceedings; Disclosure to the appropriate public authorities of infringements of the law that come to light; and Thereisaprofessionaldutyorrighttodisclose,whennotprolribitedbylaw: - To comply with technical standards and ethics requirements; - To protecthe professional interests of a professional accountant in legal proceedings; ' ' body or professional - To comply with the quality review of a member oooy t body; or - To respond to an inquiry or investigation by a member body or regulatory body. Article 2L: whether to disclose confider.rtial information, professional accountants shor-rld In deciding consider thefollowing Points: tr) (2) (3) Wlren a client or employer gives autlrorization to disclose infornration, whetlrer or not the i'terestt'oill ihe parties, incl,ding third parties whose i'terests might be affected, could be hanned; Whether or not all the relevant information is known and substantiated' to the extentitispracti.uot";wi,"nthesituationinvolvesunsubstantiatedfacts, incomplete information or unsubstantiated conclusions, professional judgment shor.rld be used in O.t.-*ining U't. type of disclosure to be made, if any; and Thetypeofcommunicationtlratisexpectedandtowhomitisaddressed;in narticular,professiorralaccountantsshouldbesatisfiedthatthepartiestowirom il;;-rnlrr.il.",i"n is addressed are appropriate recipients. PART 5 PROFESSIONAL BEHAVIOR Article 22: The principle of professional behavior imposes an obligation on professional accountants to comply with relevan;;r and regulatiorx'and avoid ariy action tirat might bring discredito the profession. This ;i;" ;;ii-t tlo situations, wtrich toutd b" presumed by a reasonable and informed third party, having knowledge of all relevant information' to impact on the good reputation of the Profession' Article 23: ln nrarketing and promotir,g themselves and their work' professional accountants should not bring the prot rrion"i,ri"'a?rr.p"". pr"fj;;ui u..o*iunts should be honest and truthful *o tnti ttiluo. exaggerated claims for the services they are able to offer, tl're qualifications they possess' or experience they have gained; or

7 Article 24: (2) Make disparagingreferences or unsubstantiated comparisons to the work of others. CI{APTER 4 TIIFSATS AND SAFEGUARDS Compliances with the fundamental principles may potentially be threatened by a broad range of ciicumstances. Many threats fall into the following categories: (1) Self-interest threats, which may occur as a result of the financial or other interests of professional accountants or of immediate or close famiiy members; (2) Self-review threats, which may occur when a previous judgment needs to be revaluated by the professionaiaccountant responsible for that judgment; (3) Advocacy threats, whieh may occur when a professional accountant promotes a position or opinion to the point that subsequent objectivity may be compromised; (4) Familiarity threats, which may occur when, because of a close relationship, a professionai accountant becomes too sympathetic to the interests of others; and (5) intimidation threats, which may occur when a professional accountant may be deterred fiom acting objectively by threats, actual or perceived. Article 25: Safeguards that may elirninate or reduce such threats to an acceptable level fall into two broad catesories: (l) (7) Safeguarcis created by the professional body, legislation or regulation; and Safeguards in the work environment. Article 26: Safeguards created by the professional body (KICPAA), legislation or regulation inclurde, but are not restricted to: I Educational training and experience requirements for entry into the profession Continuing professional development requirements Corporate governance re gulalions Professional standards professional or regulatory monitoring and disciplinary procedures External review by a legally empowered third party of tlie reports, returlls, communications or information produced by a professional accountant'

8 Article 27: Certain safeguards may increase the likelihood of identifying or deterring unethical behavior' iu.f,,ui.guirds, whic"h mry U. created by the professional body, legislation, regulation or an emptoyinf organization, include, but are not restricted to:. Effective, well publicized complairrts systems operated by the. employing organization, the professional Uoay 6tclAA) or a regulator, which enable colleagues,,employersandmembersofthepublictodrawattentionto unprofessional or unethical behavior.anexplicitlystateddutytoreportbreachesofethicalrequirements. Article 28: The nature of the safeguards to be applied will vary depending on the circumstances' In exercising their juclgrnjnt, professional-accountants s-hould consider what a reasonable and inforrned third pany, iravi'g knowledge of all releva'i inforrnation, incl-rdi'g the significance of the threat and tire safeguirds applied, would conclude to be unacceptable' Article 29: CHAPTER 5 ETIIICAL CONFLICT RESOLUTION ln applying standards of ethical conduc! professional accountants may encounter problems in resolving a1 ethical conflict or ethical conduct' When faced with siglificant ethical issues' they should follow the established policies of their firm, employing organization or professional body or KICPAA' Article 30: when initiating either a formal or informal conflict resolution process' professional accountantshor-rld consider the following, either individually or together with others, as part of the resolution Process: (l ) Relevant facts; (2) Ethical issues involved; i:i Fundamental principles related to the matter in question; i+i Established internal procedures; an! (5) Alternative colrrses of action' Having considered these issues, professional accountants should determine the best course of action consistent witli the fundamentat principles identified. They should also weigh the consequenc., of.u.l','porriur. courseof.action' If the matteremains unresolved' they should approach other appropriate persons within their firm or their employing organization for help in obtaining resolution.

9 Article 31: where a matter involves a conflict with, or within, an organization' professional accolntants should also consider approaching the audit committee or other body responsible for governance ofthat orgunijurion. Itiray be,in the best interests ofthe professional accountants to documentthe subsiance of the issue and details of any discussions held or decisions taken' concerning that issue. Article 32: lf a signihcant conflict cannot be resolved, professional-accountants may wish to consult the relevant professional Uody, w1,i.h ma1 be atle to provide guidance on ethical issues without breaching confide'tiality' 'iney 'ouy uito consider seeki*g legal advice' ^; Artlcle JJ: if, after exhausting all relevant possibilities, the matter remains unresolved' professional accollntantshould, *ft.r"-pottibie' refgse to remain associated with the matter' They may a soconsiderwlrether,intlrecircumstances,itisappropriatetowithdrawfromtlre engagementeam or specific assignment, or to resign aitogether from the engagement' firm or the employing organization' Article 34: pursuant to the article 7 of the Royal Kram No. 18 l{s$.un dated 19 March 2003 on organisationandfunctioningoftlrekampuchealnstituteofcertifiedpublicaccountantsand Audirors, the punish of thi discipline will be engaged to all professional accounthnts in breach of tire professional provision or any action;s iilttlto.the moral or reputation of the. profession of flre professional accountants even thought beside its profession' Discipiine Cornmittee of KICPAA has the cornpetence to j*dge irithe conflict involve to the activity of the professional accountants' Article 35: The person concerned can n-iake a complainto the Disciplinary committee of KICPAA' Tlte accusation will be made by the council Govt'ning of KICPAA itself or with the complaints frorn the member of KICPAA or from the third parry or Government cornmissioner accompany witir I{CPAA' CHAPTER 7 FINAL PROVISIONS Article 36: All the provision above alsoimplement to Cambodian Auditor as member of KICPAA'

10 Article 37: Any provisiotls contrary to this Anukret shall be deemed null and void' Article 38: The Cabinet Minister, the Minister of Economy and Finance,Jvlinisters, Secretaries of State, National Accountinj Council, Kampuchea Institute of Certified Public Accountants' ministries and agencles concerned are responsible for the enforcement of this Anukret from the date of its signature. Phnom Penh, 17 June 2005 TIIE PRTME MII\ISTER Signed and Sealed TIUN SEN Copy To: - Ministry of RoYal Palace - Constitutional Council - General Secretariat of Senate - General Secretariat of AssemblY - National Auditing AuthoritY - Cabinet of Samdech Prime minister - General Secretariat of Royal Government - As Article 38 - Recolds and Dogumentation 10