Accounting ethics exist because financial numbers drive investment, loans, taxes, and trust in the economy. If accountants fudge numbers, the whole system breaks. The rules come from professional bodies, laws, and international standards.
Core Ethical Principles
Most codes, including ICAN and ACCA, follow the 5 principles from the IESBA Code of Ethics:
Integrity:
Be straightforward and honest. Don’t knowingly misrepresent facts or be associated with false info.
Objectivity: Don’t let bias, conflict of interest, or others override professional judgment.
Professional Competence & Due Care: Keep skills updated. Work diligently and in line with standards. Don’t take on work you can’t do properly.
Confidentiality: Don’t disclose client/company info without authority, unless legally required.
This lasts even after the engagement ends.
Professional Behavior: Comply with laws and avoid actions that discredit the profession. No tax evasion, fraud, or misleading conduct.
Key Rules & Regulations in Nigeria
Common Ethical Threats & Safeguards
Threats are situations that can break the 5 principles. You manage them with safeguards:
Self-interest threat: Auditor owns shares in client company.
Safeguard: Prohibit financial interest, rotate audit partners every 5 years.
Self-review threat: Accountant audits their own bookkeeping work.
Safeguard: Separate teams for bookkeeping and audit.
Advocacy threat: Promoting client’s position to the point of losing objectivity.
Safeguard: Don’t act as both advocate and auditor.
Familiarity threat: Too close to client, stop challenging them.
Safeguard: Partner rotation, quality reviews.
Intimidation threat: Client threatens to fire you if you don’t approve wrong entries.
Safeguard: Document pressure, report to audit committee, withdraw if needed.
What Happens If You Break the Rules
Professional level: ICAN/FRC can issue warnings, fines, suspend license, delist you.
Civil level: You can be sued for negligence or misstatement. Auditors pay damages.
Criminal level: Under CAMA and Money Laundering Act, false financial statements and non-reporting of suspicious transactions carry jail terms and fines.
Practical Rules Every Accountant Should Follow
Document everything: If it’s not documented, it didn’t happen. Working papers protect you.
Independence first: Don’t audit a company where you have family, financial, or employment ties.
Say no to pressure: If management asks you to “adjust” numbers to meet targets, refuse and escalate.
Keep learning: IFRS and tax laws change. Using outdated rules is a breach of due care.
Whistleblow when needed: Both ICAN and CAMA have provisions protecting you if you report fraud.
In conclusion, ethics in accounting isn’t just “don’t steal”. It’s about staying independent, competent, and transparent so users of financial statements can trust the numbers.
– Benjamin Ibrahim writes from Lokoja, Kogi state.
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