What is a professional code of conduct?

In this article, we are going to be exploring professional codes of conduct, starting with what they are, why they are important, and what they might include or cover. From there, we will be going on to discuss some of the main professional codes of conduct that apply to accountants and bookkeepers, including the APES 110 Code of Ethics from the Accounting Professional and Ethical Standards Board for accountants and the Institute of Certified Bookkeepers’ Code of Conduct for bookkeepers.

A professional code of conduct (also sometimes referred to as a code of ethics) is basically a set of guidelines or principles that outline the values and types of behaviours that are expected from someone working in a particular workplace or profession.

Sometimes, professional codes of conduct will apply to an entire industry or profession, meaning that everybody who works in that industry or profession must comply with them. Other times, professional codes of conduct may be specific to a single company or particular workplace.

Likewise, professional codes of conduct can be either voluntary (meaning that employees are encouraged to comply with them, but they are not mandatory) or compulsory (meaning that employees are required by law or by contract to comply with them - for example, as a condition of their registration in a particular profession or as a condition of their contract of employment).

Why are professional codes of conduct important?

Professional codes of conduct serve a number of different functions, both within individual companies and organisations and across entire industries or professions as a whole. Some of the reasons why professional codes of conduct are important include that they:

Help to set clear expectations around what the business or company expects from its employees
Provide staff with a clear understanding of the business or company’s mission and values
Ensure staff have a clear understanding of their responsibilities and obligations, and how they are expected to behave in the workplace
Create a clear distinction between right and wrong
Create a workplace where all employees are treated with respect, and behave in a way that is ethical and which aligns with the business or company’s values
Enable informed and effective decision making (by both employees and the business or company)
Create standardised expectations and processes around things like behaviour, problem solving, and decision making
Ensure that all employees and companies operate with ethics and integrity, and that they behave in a way that represents the profession as a whole in a positive light

What might a professional code of conduct include or cover?

Exactly what a professional code of conduct looks like and what it contains may vary significantly from company to company and industry to industry. This may also vary depending on whether the professional code of conduct in question is something that governs every employee within a particular industry, or whether it only applies to employees who work at a particular company or within a certain workplace.

As a general guide though, here are some of the key areas that will typically be covered in a professional code of conduct:

The mission of the business or organisation
The values and ethics that underpin the activities of the business or organisation
The goals of the business or organisation
Key ethical or behavioural principles that employees are expected to uphold and be bound by during the course of their work or employment
Standardised policies, procedures, and processes that govern how different situations are handled and responded to in the workplace
Rules around what employees can and cannot do in the workplace
How specific tasks are supposed to be handled (e.g. if these are to be completed in a standardised way by all employees within the industry, profession, or workplace)
Expectations around how employees are expected to act, behave, and conduct themselves, including in relation to things like:Dress codesAnti-bullyingDiversityEqual opportunitiesUse of company equipment and resourcesAttendanceWorkplace health and safetyBreaksPrivacy and confidentialityIntellectual property Conflicts of interest
How disciplinary infractions or grievances will be managed

How to develop a professional code of conduct

As we touched on previously, a lot of the time, professional codes of conduct can be specific to a certain industry or profession, and will set clear behavioural expectations that govern how every person in that industry or profession carries out their duties within their role. Where a business, company, or workplace is wanting to develop their own professional code of conduct that will guide the behaviour and performance of employees within their own office or workplace, there are a few key things they should keep in mind.

Obligations under existing professional codes of conduct: If the business or company is operating within an industry or field that already has its own codes of conduct in place that govern all employees within that field, it is important that the business or company’s own code of conduct does not contradict this. For example, if a particular behaviour or type of conduct is prohibited in an industry’s code of conduct you would not have a company code of conduct saying that that type of behaviour is acceptable. Instead, it’s important that the business or company’s code of conduct aligns with the industry wide code of conduct by prohibiting the same behaviours.
Stakeholder involvement: A professional code of conduct is something that will have a significant impact on stakeholders at various different levels, and the way in which they conduct themselves and carry out their day-to-day duties and activities within the company or business. Given this, it is important that relevant stakeholder groups are included and involved in the development of the company or business’s code of conduct. This might mean involving employees from various teams and departments in the decision-making process, or consulting with management and other internal and external stakeholder groups to find out what issues they are having or what they’d like to see covered in the code of conduct. This ensures that everybody feels heard and involved in making decisions that affect them, which in turn can help to promote a better sense of staff satisfaction and employee morale.
Take into account past problems and issues: It is important that the business or company considers some of the past problems and issues it has faced when formulating its code of conduct. For example, has it experienced a particular type of misconduct or unethical behaviour by its employees, or has there been a lot of confusion around a certain task or process? Alternatively, are there ethical dilemmas or other issues that other companies in your industry are struggling with? All of these things will need to be taken into account when coming up with a professional code of conduct that covers everything your employees need to know to behave ethically and with a high degree of integrity, whilst equipping them with the skills and resources they need to uphold the highest standard of professional practice.
Start with an outline: When the business or company has identified a few key areas or things they want to be covered in their professional code of conduct (both through stakeholder engagement and consideration of past problems and issues), they can then start outlining what their code of conduct will look like and the different areas or points it will cover. This could be a bullet pointed list or some rough notes. Under each area or point, they can then make further notes about the policies, procedures, requirements, or other expectations they want documented for each.
Further stakeholder consultation: The business or company can then consult with their stakeholders again. These stakeholders will be the same as those who were involved in the earlier stage of the process, where they were asked for their input about the issues that affect them, and the areas they would like to see covered or clarified in the code of conduct. This time though, the company or business will be running their rough notes or draft of the proposed code of conduct by them, and taking on board any feedback or questions they have about its contents. Based on the feedback received, it may be necessary to make revisions to the draft to fix any issues, errors, or omissions that have been identified during this stakeholder consultation process.
Finalising the code: Once all of the relevant stakeholder groups (e.g. staff, management, other internal and external stakeholders) have had the opportunity to review and provide their feedback on the rough draft, it will then be time to finalise it and turn it into an official code of conduct. This might mean developing your rough notes and turning them into more detailed policies or procedures, or expanding on some of the points mentioned to create a more comprehensive document that outlines exactly how different tasks are to be carried out, and what employees can and cannot do in the workplace.

As some general tips, it is important that the business or company ensures that their code of conduct is clear, concise, and easy to understand. This means avoiding complex jargon or technical language that cannot be easily understood, or avoiding confusing or overly wordy explanations that may impede understanding. Rather, everything in the code of conduct should be documented using language that is as clear, simple, and easy to understand as possible, to ensure it is accessible and understandable by all employees, as well as anybody else who may need to refer to the professional code of conduct for any reason. Including examples, scenarios, or practical applications may also help with this.

In addition, it is important that all employees and relevant stakeholders are provided with access to the code of conduct, so they can familiarise themselves with the code and ensure they are aware of their obligations under the code. The business or company should provide employees with a copy of code of conduct, inform them where it will be stored if they need to review or access it again in future, and ensure it is stored in a place that is easy to find and accessible by anyone who may need to refer to it.

What professional codes of conduct apply to accountants and bookkeepers?

Nearly all workplaces and professions will have a professional code of conduct. Sometimes, these codes of conduct may be set by a professional association or regulatory organisation, to govern everybody who works within that particular profession. Other times, professional codes of conduct may be implemented within a particular business, company, or organisation, and will be something that all employees working within that particular workplace are expected to adhere to.

The accounting and bookkeeping fields are no different, in that both have their own professional codes of conduct in place that outline the standards of behaviour that are expected from professional accountants and bookkeepers. It is important that accounting and bookkeeping professionals familiarise themselves with the professional codes of conduct that apply to them, to ensure that their behaviour aligns with the standards set out in these codes.

For accountants

In Australia, the main professional code of conduct that applies to accountants is the APES 110 Code of Ethics from the Accounting Professional and Ethical Standards Board. This sets out the five key ethical principles and behavioural expectations that all Australian accountants are expected to abide by - for example, that “a distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest. A Member’s responsibility is not exclusively to satisfy the needs of an individual client or employing organisation.”

This professional code of conduct also sets out five other principles that should guide the professional conduct and behaviour of practicing accountants. These five principles are:

Integrity - namely, that the accountant should “be straightforward and honest in all professional and business relationships”
Objectivity - that is, that the accountant should “not compromise professional or business judgements because of bias, conflict of interest or undue influence of others”
Professional competence and due care - that is, that the accountant has a duty and obligation to “attain and maintain professional knowledge and skill at the level required to ensure that a client or employing organisation receives competent Professional Activities, based on current technical and professional standards and relevant legislation” and “act diligently and in accordance with applicable technical and professional standards”
Confidentiality - namely, that the accountant must “respect the confidentiality of information acquired as a result of professional and business relationships”
Professional behaviour - meaning the accountant must “comply with relevant laws and regulations and avoid any conduct that might discredit the profession”

This code of conduct for accountants also provides detailed advice and guidance on how accountants are expected to approach and handle issues like conflicts of interest, financial interests, compensation, incentives, expertise, and second opinions. This advice and guidance helps to ensure that all accountants practice ethically and with a high degree of integrity, and that professional accounting practice is carried out consistently (i.e. in the same way) across the entire industry.

This is supported by the Australian Accounting Standards Board (AASB)’s Standards, whilst not technically being a professional code of conduct, still provides a series of standards, policies, and procedures to guide accounting practice and behaviour - particularly in relation to issues like contracts, payments, financial instruments and statements, transactions, taxes, benefits, equipment, assets and the disclosure of interests, to name but a few of the areas covered in these standards.

For bookkeepers

Bookkeepers in Australia are governed by a different professional code of conduct, which is the Institute of Certified Bookkeepers’ Code of Conduct. Whilst this is separate and a different professional code of conduct to the one that governs accountants, you will find that it covers many of the same behavioural expectations and ethical principles as they apply to professional bookkeeping practice.

Some of the key ethical and behavioural obligations set out in this code of conduct for bookkeepers include that:

“A member may not engage in any activities which are likely to bring themselves or the profession of bookkeeper or of the Institute into disrepute.”
“A member may not engage in dishonest or otherwise discreditable activities.”
“A member must not compromise their professional standards or engage in or act so as to assist or conceal any criminal act even if by doing so the member may act contrary to the instructions of their client.”
“A member is not obliged to accept any work and must not accept any work which the member lacks sufficient expertise or competence to complete.”
“A member must preserve the confidentiality of their client’s or employer’s affairs absolutely unless required to make such disclosure by law or by the direction of the Institute or to prevent the commission of a crime.”
“A member must not make or prepare any account or record which they know is or may be false or misleading.”
“A member must at all times be courteous to all those with whom they have professional dealings.”

As you can see, these behavioural expectations are fairly similar to those for accountants, as they revolve around important ethical principles like integrity, objectivity, professional competence, confidentiality, and professionalism.

This professional code of conduct also covers things like the duties and responsibilities that bookkeepers have to the Institute itself (for example, to pay membership fees, pay insurance, and to keep them updated on any changes in contact details). It also sets out the requirements that bookkeepers need to fulfill in order to be able to practice, and covers the processes around disciplinary action, grievances, and investigations, to ensure that these issues are managed consistently and in a standardised way across the Australian bookkeeping industry. This helps to ensure fairness, whilst promoting a high standard of ethics and integrity.

Professional codes of conduct for international accountants

The above sections outline the professional codes of conduct that apply to accountants and bookkeepers who practice within Australia. Whilst, for the purposes of this article, we will be focusing on the practice of Australian bookkeeping and accounting professionals, it is worth noting that the specific professional codes of conduct that apply to accountants and bookkeepers can vary somewhat from place to place and country to country.

It would be impossible to touch on every professional code of conduct that applies to accountants and bookkeepers around the world. However, as an example, accountants in the UK are governed by the Institute of Financial Accountants’ Code of Ethics for Professional Accountants. UK accountants may also be governed by the Institute of Chartered Accountants in England and Wales Code of Ethics and International Code of Ethics for Professional Accountants. Accountants in the US may be bound by the Association of International Certified Professional Accountants, and bookkeepers by the Institute of Certified Bookkeepers USA’s Code of Conduct. Whichever country an accountant or bookkeeper practices in, it is important they do their own research and due diligence to identify the practice requirements, behavioural expectations, and ethical standards that apply to them.

In conclusion, it is important for professional accountants and bookkeepers to educate themselves on the professional codes of conduct that apply to them, and ensure they familiarise themselves with these to ensure that they are conducting themselves and their professional practice in a way that corresponds with the duties, responsibilities, and obligations set out in these important documents.

Not only do accountants and bookkeepers need to ensure that they are familiar with the professional codes of conduct that govern their industry or profession as a whole, but it is also important that they ensure they are familiar with any company-specific codes of conduct that their employer or workplace may have in place.

In terms of the professional codes of conduct that govern accounting or bookkeeping practice on a whole, full copies of each organisation’s standards and codes can be found on their respective websites. For company or workplace-specific procedures, the accountant or bookkeeper will need to source these from their manager or employer. By having access to both of these important documents, accountants and bookkeepers can ensure that they are acting with ethics and integrity, and that they are delivering the best possible standard of professional practice at all times.

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