Task 2

BAB 5

CODE OF ACCOUNTING PROFESSION

CODE OF PROFESSIONAL CONDUCT AICPA:

The code of ethics is defined as a common grip that binds each member, as well as acting sutu pattern that applies to every member of the profession. The main reason the need for a high level of professional action by any profession is the need for public confidence on the quality of services provided by the profession, regardless of each – each individual who provides such services.

Ethics can be broadly defined as a set of moral principles or values. Every organization has a set of values like that, even though we pay attention or do not pay attention to it explicitly. The need for ethics in society is quite important, so many common ethical values incorporated into the legislation.

Ethical behavior is the foundation of modern civilization underlines the success of the functioning of virtually every aspect of society, from everyday family life to law, medicine, and business. Ethics (ethically) refers to a system or code of conduct based on moral obligations which shows how an individual should behave in society.

Ethical behavior is also the foundation of modern professionalism. Professionalism broadly defined, refers to the behavior, purpose, or qualities that characterize or characterize members of a profession or professional people. The entire profession perilakuyang set rules or code defines ethical behavior for members of the profession. Professional code of conduct consists of: Principles – principles, Code of Ethics, Interpretation of the Code of Ethics and Code of Ethics.

 

1. AICPA Code of Professional Conduct consists of two parts:Principles of Professional Conduct (Principles of profesionnal Conduct); declare   acts – ideal behavior and conduct.
2. Code of Conduct (Rules of Conduct); establish minimum standards.

Six Principles of Professional Conduct:

1. Responsibilities: In carrying out its responsibilities as professionals, members must implement the professional judgment and morals in the whole family.
2. Public interest: Members must accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism.
3. Integrity: To maintain and broaden public confidence, members must implement all professional responsibilities with a sense of integrity.
4. Objectivity and independence: Members must maintain objectivity and conflict-free assignment in the execution of professional responsibilities.
5. Accuracy and precision: Members must observe technical standards and standards of professional conduct.
6. The scope and nature of the services: Members in public practice shall observe the principles of Professional Conduct in determining the scope and nature of the services to be provided.

• IFAC CODE OF ETHICS

The code of ethics drawn up by SPAP is a code of ethics International Federations of Accountants (IFAC), which is translated, so this code is not a new thing then adjusted to IFAC, but adopted from the source of IFAC. So there is no significant difference between the SAP and the IFAC code of ethics. Adoption by the Council SPAP ethics is certainly in line with the mission of Indonesia’s accountants did not champion. Moreover, the mission of the International Federation of Accountants as the so-called constitution is to develop a global improvement accounting profession with harmonized standards so as to provide the highest quality service consistently to the public interest. A member of IFAC and KAP should not set standards that are less precise than the rules in the code of conduct. Professional accountants need to understand the differences in the rules and guidelines of several regional jurisdiction, unless prohibited by law or legislation

1. Fundamental Principles of Ethics IFAC:A professional accountant should act decisively and honest in all professional and business relationships.
2. professional accountant should not allow bias, conflict of interest, or under penguruh others sehinggamengesampingkan business and professional judgment.
3. Professional competence and prudence. An accountant profesionalmempunyai duty to maintain professional knowledge and skills on an ongoing basis at a rate dipelukan to menjaminseorang client or employer receives competent professional services yangdidasarkan on development practices, legislation, and current techniques. Seorangakntan professionals must work diligently and follow professional standards thirsty work diligently and follow the standards profesionaldan accepted technique in providing professional services.
4. A professional accountant should respect kerhasiaaninformasi gained as a result of professional relationships should not be author of the bisnisserta any information to third parties without izinyng enar and specific, unless there are legal obligations or professional right to express them.
5. Professional Conduct. A professional accountant should comply with the law and relevant legislation and should avoid any action that dapatmendiskreditkan profession.

• CODE IAI

The code of ethics is a system of norms, values and professional rules written expressly stating what is right and good, and what is not right and not good for the professionals. Indonesian Institute of Accountants Code of Conduct is a code of conduct, ethical accountants in meeting their professional responsibilities

IAI-KASP ethical rules contains seven basic principles of ethical behavior of auditors and four other general guidelines with regard to the ethical behavior. IAI seven core principles are:

1. Integrity

Integrity relates to the profession of auditors who can be trusted for upholding truth and honesty. Integrity is not only a form of honesty but also trustworthiness, act fairly and based on the actual situation. This is demonstrated by the auditor when it raises personal excellence when providing professional services to the institution where the auditors’ work and to auditannya.

2. Objectivity

Auditor objective is an impartial auditor so that the independence of the profession can be maintained. In taking a decision or action, he may not act on the basis of prejudice or bias, conflict of interest, or the influence of others. Objectivity is practiced when the auditor take decisions in its audit activities. Auditor objective is the auditor who make decisions based on all available evidence, and not because of the influence or based on opinions or personal prejudice or pressure and influence of others.

3. Competence and Precautions

In order to provide quality audit services, the auditor must have and maintain competence and diligence. For that auditors should always enhance the knowledge and expertise of the profession to the extent necessary to ensure that the institution where he works or audited can receive the benefits of the service profession based development practices, rules-danteknik latest techniques. Based on this basic principle, the auditor can only perform an audit if he has the necessary competence or using the help of experts who are competent to perform his duties satisfactorily.

4. Secrecy

Auditors should be able to maintain the confidentiality of information obtained in conducting the audit, although the overall audit process may be conducted openly and transparently. The information is the property of the audited, for the auditor must obtain special approval if they want to express, unless their disclosure obligations for legislation. This secrecy must be maintained until any time even when the auditor has stopped working at the office. In principle, this confidentiality, auditors are prohibited from using the information in its possession for their own interests, for example, for financial gain.

5. The principle of confidentiality does not apply in the following situations:

Disclosure permitted by the authorities, such as audited and the institution where she worked. In this disclosure, the auditor should consider the interests of all parties, not only he, the audited, the institution, but also including other parties who may be affected by the disclosure of this information.

6. Accuracy of Acting

The auditor should be able to act consistent in maintaining the reputation of the profession and public sector institutions accounting profession and refrain from any actions that could discredit himself as a professional institution or a professional auditor. Appropriate measures need to be promoted through leadership and exemplary. If the auditor know of another auditor perform actions that are not true, then the auditor must take the steps necessary to protect the public, the profession, professional institutions, the institution where she worked and members of other professions from the actions of another auditor is not correct it.

7. Technical and professional standards

The auditor should conduct an audit in accordance with auditing standards applicable, which includes technical and professional standards relevant. These standards are set by the Indonesian Institute of Accountants and the Government of the Republic of Indonesia. In the audit of public agencies, there are also auditing standards they set and apply to auditors, including the rules of conduct established by the agency where he works. In the event of any discrepancy and / or conflict between the auditing standards and rules of the profession with auditing standards and rules of the agency, then the problem is returned to the respective institutions and the rule standard setter.

• RULES AND INTERPRETATION OF ETHICS

Interpretation of Rules of Ethics is an interpretation issued by the Agency established by the Association after considering feedback from members, and other interested parties, as a guide in the application of ethics rules, without intended to limit the scope and application. Statement of Professional Ethics that applies today can be used as Ethics Rules Interpretation and or until the issuance of a new interpretation of the rules and to replace it.

1. Ethics rules:

• Independence, integrity, and Objectivity
• General Standards and Accounting Principles
• Responsibilities to Clients
• Responsibilities to colleagues
• Responsibility and other practices

2. interpretation of Ethics

In practice there is no ethical absolutes. Ethical standards also vary depending on the social sebuahkomunitas, depending on culture, norms, and values embraced by the community. Both the community in its form as a region, country, religion or community group. There is no universal ethics.

Outline of the Code of Ethics and Professional Conduct

1. Contribution to society and human welfare.
2. Avoid hurting others.
3. Be honest and trustworthy
4. Be fair and do not discriminate against the values of equality, tolerance, respect for others, and the principles of equal justice in a set order.
5. Property rights including the copyright and patent rights.
6. Give proper credit for intellectual property.
7. Respect the privacy of others
8. Trust

 

• INTERPRETATION OF RULES OF CONDUCT According to AICPA

Indonesian Institute of Accountants Code of Ethics is intended as a guide and rules for all members, whether practicing as a public accountant, worked in the corporate world, in government agencies, as well as in the world of education in the fulfillment of their professional responsibility rules.

The purpose of the accounting profession is fulfilling its responsibilities with the highest professional standards, reached the highest levels of performance, with an orientation to the public interest. To achieve these objectives, there are four basic requirements that must be met, namely:

1. Society needs the credibility of information and information systems.
2. Required individual who can clearly be identified by the service users.
3. Quality of Services. The presence of the belief that all services obtained from the accountant provided with the highest performance standards.
4. Accountant service users should be able to feel confident that there is a framework of professional ethics underlying the provision of services by accountants.

Indonesian Institute of Accountants Code of Ethics consists of three parts:

1. Principles of Ethics

Ethical Principles provide a basic framework for Ethics Rules, which regulates the implementation of the provision of professional services by the member.

2. Ethics rules

Ethical Principles provide a basic framework for Ethics Rules, which regulates the implementation of the provision of professional services by the member. Principles of Ethics was passed by Congress and apply to all members,

3. Interpretation of Ethics Rules

Ethics rules approved by the Meeting of the Association Members and only binds members of the Association concerned.

BAB 6

Ethics In Auditing

• public confidence

Public confidence as an independent audit of the service users is essential for the development of the public accounting profession. Public confidence will be reduced if there is evidence that the independence of the auditor it turns out is reduced, even public confidence can also be decreased due to the circumstances they are sensible (reasonable) are considered to affect the independence stance. To be independent, the auditor must be intellectually honest, free from any obligations towards its clients and does not have an interest with its clients both a management company or owner of the company. Competence and independence of the auditor in its application will be related to ethics. Accountants have an obligation to maintain the highest standards of ethical behavior to the organization in which they take shelter, their profession, the community and themselves where accountants have the responsibility of being competent and to maintain their integrity and objectivity.

(Nugrahiningsih 2005 in Alim et al 2007).

• Auditor’s Responsibility to the Public

The accounting profession in the community has a very important role in maintaining the functioning of the business in an orderly manner to assess the fairness of the financial statements presented by the company. Dependence between public accountant with lead responsibility to the interests of the public accountant. In the code of conduct is disclosed, accountants not only have a responsibility to clients who pay, but also has a responsibility as well to the public. The public interest is defined as the interest of the people and institutions that served as a whole. The public will expect accountants to fulfill its responsibilities with integrity, objectivity, thoroughness professionalism, and to serve the public interest. The accountant is expected to provide a quality service, wearing the appropriate rewards services, and offers a variety of services with a high degree of professionalism. On a given public trust is an accountant must continually demonstrate their dedication to achieve the high level of professionalism.

Buger Justice revealed that an independent public accountant to provide a valuation report on the company’s financial statements considers that responsibility to the public that goes beyond the relationship between the auditor and the client. Independent public accountants have different functions, not only adhere to the creditors and shareholders, but also serves as “a public watchdog function”. In carrying out the functions of an accountant should maintain its independence as a whole at any time and meet loyalty to the public interest. This makes the conflict of interest between the client and the public on loyalty konfil auditor.

It is also disclosed by Baker and Hayes, a certified public accountant that is expected to provide a professional service in a different way to benefit from contractual arragment between public accountants and clients.

When the auditor receives audit assignment against a company, it makes konsequensi to the auditor to be responsible to the public. Assignment to report to the public about the fairness of the financial statements and the description of the operation of the company for a certain time gives “fiduciary responsibility” to the auditor in order to protect the public interest and independent attitude of the client used as a basis for maintaining the trust of the public.

• Basic Responsibilities of Auditors

The Auditing Practice Committee, which is the forerunner of the Auditing Practices Board, in the 1980s, giving a summary (summary) of the auditor’s responsibilities:

1. Planning, Control and Recording. Auditors need to plan, control and record his work.
2. Accounting System. The auditor should ascertain the system for recording and processing of transactions and assess their adequacy as a basis for preparing the financial statements.
3. Audit Evidence. The auditor would obtain audit evidence that is relevant and reliable to provide a rational conclusion.
4. Internal Control. If the auditors wish to place confidence in the internal controls, should ensure and evaluate the controls and perform compliance tests.
5. Revisited Relevant Financial Statements. Auditors carry out review the relevant financial statements as necessary, in conjunction with the conclusions drawn by other audit evidence obtained, and to provide a rational basis for the opinion on the financial statements.

• The auditor’s independence

Independence is the foundation of the auditing profession. That means the auditors will be netralterhadap entity, and therefore will be objective. The public can trust the auditor auditkarena functions behave impartially and acknowledges the obligation to bersiikap fair. Entitasadalah client auditor, but the CPA has a greater responsibility to the auditors clear penggunalaporan known. Auditors should not position themselves or under group pertimbangannyadi anything and anyone. Independence, integrity and objectivity of the auditor third mendorongpihak to use the financial statements included in the auditor’s report with confidence and trust completely.

• Capital Market Regulation and Regulator regarding public accountant independency

On 28 February 2011, the Capital Market Supervisory Agency and Financial Institution (Bapepam-LK) has issued regulations governing the independence of accountants who provide services in the capital market, namely by Regulation No. VIII.A.2 attachment Bapepam Chairman Decree No. Kep-86 / BL / 2011 concerning Independence of Accountant Provide Services in Capital Market.

As published in the Press Release of Bapepam LK on February 28, 2011, Rule No. VIII.A.2 is a refinement of the rules that have been there before and aims to provide convenience for the Office of Public Accountant or Public Accountant in providing appropriate professional services in their respective sectors. Here is his decision:

DECISION OF CHAIRMAN OF CAPITAL MARKET SUPERVISORY AGENCY

NUMBER: KEP-20 / PM / 2002

INDEPENDENCE OF ACCOUNTANT GIVING AUDIT SERVICES IN CAPITAL MARKET

Provisions concerning Independence of Accountant Provide Audit Services in Capital Market, set in VIII.A.2 RULE NUMBER: INDEPENDENCE OF THE ACCOUNTANT gives AUDIT SERVICES IN CAPITAL MARKET:

 

1. Definition of terms in this rule are:

a. Audit Period and Period Professional Designation:

1) Audit Period is the period covering the period of the financial statements audited or reviewed in; and

2) Professional Designation Period is the period of assignment to audit or review the client’s financial statements or to prepare a report to Bapepam.

b. Family Member is a wife or husband, parents, children, both within and outside of dependents and siblings.

c. Contingent Fee is a fee that is set for the implementation of a professional service that will only be charged when there is a specific finding, in which the amount of the fee depends on the specific findings or results. Fee considered contingent if established by a court or regulatory body or in terms of taxation, if the basis of the determination is the result of legal settlements or findings of regulatory agencies.

d.People In Public Accounting Firm are:

1. People who are included in the Task Team Audit is sema colleagues, leadership, and professional employees who participated in the audit, review, or assignment attestation of clients, including those who do study further or act as a peer to the two during the Audit Period or assignment attestation on issues of technical or specialized industries, transaction, or important events;
2. People who are included in the chain of executive / command all those who:

a. supervise or have direct management responsibility of the audit;

b. evaluate the performance or recommend compensation for the fellow in the audit assignment; or

c. provide quality control or other oversight over the audit; or

3.Every other colleagues, managers, or other professional employee of a public accounting firm that has provided non-audit services to clients.

a. Key employees ie those persons having authority and responsibility answerablefor planning, directing and controlling the activities of the reporting enterprise, including commissioners, members of the Board of Directors, and managers of the company.

2.Timed Period Professional Designation:

1. Professional Designation period starting from the commencement of field work assignment or signing, whichever occurs first.
2. Professional Designation period ending on the date of the Accountant’s report or a written notice by the accountant or the client to Bapepam that penugasa have been completed, whichever is earlier.

3. In providing professional services, especially in giving opinions or judgments, Accountant must always maintain an independent attitude. Accountants are not independent if during the Audit Period and during the Period of Professional Assignment, good accountants, public accounting firm, as well as People In Public Accounting Firm:
4. has a financial interest, directly or indirectly material to clients, such as:

1) investments in the client; or

2) any other financial interest in the client which can cause bentura interests.

b.have an employment relationship with the client, such as:

1) doubles as Key Management Personnel on the client;

2) has a Family Member who worked on the client as Key Management Personnel in the field of accounting and finance;

3) have a former colleague or professional employee of a public accounting firm that works on the client as Key Management Personnel in the field of accounting and finance, but after more than 1 (one) year working at a public accounting firm in question; or

4) has a peer or professional employee of the Public Accountant who previously worked on the client as Key Management Personnel in the field of accounting and finance, except those concerned did not participate in the establishment of the client’s audit of the Audit Period.

1. have a business relationship, directly or indirectly, a material with a client, or with key employees who work on the client, or the client’s primary shareholder. A business relationship in this item does not include a business relationship in terms of accounting, public accounting firm, or People In Public Accounting Firm provides audit or non-audit services to the client, or the consumer of the goods or services of the client in order to support routine activities.
2. provide non-audit services to clients such as:

1) bookkeeping or other services related to the client’s accounting records;

2) or financial statements;

3) financial information systems design and implementation;

4) appraisal or fairness opinion (fairness opinion);

5) actuarial;

6) internal audit;

7) management consulting;

8) human resource consulting;

9) tax consulting;

10) Investment Advisory and finance; or

11) any other services that may pose a conflict of interest

-provide services or products to clients on the basis of Contingent Fee or commission, or receive a Contingent Fee or commission from the client.

4. Quality Control System

Public Accounting Firm shall have a quality control system with an adequate level of confidence that the public accounting firm or its employees can maintain an independent stance into account the size and nature of the practice of the Office of Public Accountant.

5.Limitation of Audit Assignment

a.Provision services general audit of the client’s financial statements can only be done by a public accounting firm longest to five (5) consecutive fiscal year and the longest by an accountant for three (3) consecutive fiscal year.

b. Office of Public Accountants and Accountants can receive audit back to the client after three (3) financial years in a row did not audit the client.

c. Provisions referred to in paragraphs a and b above do not apply to the interim financial statements are audited for the benefit of the Public Offering.

6.Transitional Provisions

a.Public Accounting Firm that has provided audit services common to 5 (five) financial years in a row or more and still have audit engagements general for the financial year subsequent to the financial statements the client, at the time of entry into force of this regulation may only perform the engagement referred to 1 (one ) next fiscal year.

b.Accountant who has provided audit services common to the three (3) financial years in a row or more and still have audit engagements general for the financial year subsequent to the financial statements the client, at the time of entry into force of this regulation may only perform the engagement referred to 1 (one) year The next book.

7. Without prejudice to the criminal provisions in capital market, Bapepam may impose sanctions against any violation of this rule, including the party that caused the violation.

 

BAB 7

ETHICS IN PUBLIC OFFICE ACCOUNTANT

• Business Ethics of Certified Public Accountants

Ethics in the business of public accounting is necessary to regulate the behavior of accountants in performing profession. In conducting the accounting profession in Indonesia are governed by a code of ethics is a code of ethics accountant Indonesia, which is the order of ethical and moral principles that provide guidance to accountants to deal with clients, among members of the profession and also with the public. Besides the code of conduct can also be used by the users of accounting services to assess the quality and the quality of services rendered by public accountants ethical considerations as stipulated in the code of professional conduct. And if an accountant violates ethical or not doing so would result in losses

There are five rules of ethics established by the Indonesian Institute of Accountants-Certified Public Accountants Compartment (IAI-KAP). Five ethical rules are:

1. Independency, integrity, and
2. Common standards and accounting principles
3. Responsibility to clients
4. Responsibility to peers
5. Responsibility and other practices

• Social Responsibility public accounting firm as a Business Entity

As a business entity like entity – other business entities, public accounting firm is also required to be concerned with the state of society, not only in the form of “money” by making a donation, but more complex. That is, in the Office of Public Accountancy social responsibility of an institution is not a donation or giving free service. But covering the main characteristics of the public accounting profession, especially the attitude of altruism, ie mengutamakn public interest and also pay attention to fellow CPAs than the pursuit of profit. In carrying out its responsibilities as professionals, each member must always use the moral and professional judgment in all the activities he does. As a professional, members have an important role in society. In line with these roles, members have a responsibility to all users of their professional services. Members also must always be responsible for working with fellow members to develop the accounting profession, maintain public trust and responsibility in the profession to regulate itself. Collective efforts of all members are required to maintain and improve the tradition of the public accounting profession.

• The crisis in the accounting profession

The accounting profession is a danger that the crisis if every auditor or attestor acting on the wrong track, and audit opinion would be worthless. An accountant will be awkward to use tax preparers and financial journalists but the audit function that became the heart of accounting will be cut out of practice to donate almost worth – worth abuse.

The company carries out supervision of auditors who are working to implement the internal control, financial, administrative, sales, data processing, and marketing functions among the crowds.

Public accountant is a container that can assess whether the financial statements are in accordance with the principles of accounting or auditing. Differences public accountant with the company’s other services, namely services rendered by the firm will be used as a tool for making decisions. Obligations of KAP is rendered used for make a decision or have social responsibility on their business activities.

For accountants behave ethically will affect the image of the firm and to build public trust and will treat clients well and honestly, then not only increase revenue but also provide a positive influence for employees of KAP. Ethical behavior will provide more benefits for managers KAP KAP compared to other employees. Gaps are in addition to audit also do consulting, financial reports, preparing tax reports. Therefore, there is a gap diatara accounting profession and accounting profession must.

The problems faced by the Accountant, as follows:

1. In connection with the earnings management.
2. Examination and presentation of the accounting issues.
3. In connection with the cases undertaken by tax accountants to prepare financial statements that the tax does not deviate from the rules.
4. The independence of the company and the future independence of KAP. A shortcut to make money and practical purposes other than for profit.
5. Problems adequacy of generally accepted principles and assumptions that are separate from the principles they use would pose ethical impact when the accountants give a true and accurate.

• Enforcement Ethics Regulation in the framework of the Public Accounting Firm

In Indonesia, through PPAJP – Dep. Keu., The government implemented regulations that aims to provide guidance and oversight related to ethics enforcement against public accounting firms. This is done in accordance with regulations made by the professional association of its members.

Recent developments indicate that the authority of the international world public accounting arrangements began to be withdrawn to the government side, starting with the United States that make up the Public Company Accounting Oversight Board (PCAOB). PCAOB is a semi-governmental institution established by the Sarbanes Oxley Act of 2002. This corresponds to a decline in public confidence in the weak regulation conducted by professional associations, especially since the Enron and Wordcom that bankrupted Arthur Andersen as one of the Big-5 ie offices large public accountants worldwide. Previously, the authority of a very large professional associations, among others:

1. The creation of standard accounting and auditing standards
2. Examination of the audit working papers, and
3. santions

The AP in the bill, the regulation of public accounting tightened along with the proposed heavy disciplinary sanctions and administrative fines were great, especially in the case of violations of the application of the Public Accountants Professional Standards (SPAP). In addition to the criminal sanctions also added fake public accountant (or person claiming to be a public accountant) and to the public accountant who violate the implementation of SPAP. The whole regulation is intended to improve the quality of financial reporting, improve public confidence and protect the public interest through improved auditor independence and audit quality.

• peer Review

Peer review is a process of self-regulation by the profession or the evaluation process involving qualified individuals that are relevant in a particular field. Method of peer review works to maintain standards, improve performance and provide credibility. In the world of academic peer review is often used to determine an academic paper ‘s suitability for publication.

Peer review can be categorized by the type of activity and by field or profession in which the activity occurs. In general, those involved in professional organizations or specifically given to identify specific process them by “peer review” a generic term. Thus, even when qualifications are applied elements of peer review may seem inconsistent.

This process is performed by the editor or the editor to select the funding bodies to decide on grants. Peer review is intended to meet the standards of discipline they controlled and scientific standards in general. Publications and awards that are not through the peer review may be suspected by academics and professionals in various fields. In fact, the scientific journal sometimes found error, fraud (fraud) and so forth that can reduce their reputation as a reliable scientific publishers.

SUMBER:

https://sariioktavia.wordpress.com/2016/01/03/etika-dalam-auditing/

https://bevivanesa.wordpress.com/2015/10/15/perilaku-etika-dalam-profesi-akuntansi/

http://anatasyaaa.blogspot.co.id/2015/10/etika-dalam-kantor-akuntan-publik.html

 

Task 1

BAB 1

understanding Ethics

• Understanding Ethics

Understanding Ethics (etymology), derived from the Greek word is “Ethos”, which means the character of decency or customs (custom). Ethics is usually closely related to the word moral is a term from the Latin, ie “Mos” and the plural “Mores “, which also means custom or way of life of a person by doing good deeds (decency), and avoid things that will make it worse. Ethics and morality is more or less the same sense, but in everyday activities there are differences, especially moral or morality for the assessment of actions undertaken, while ethics is to study the systems of values prevailing. Another term that is synonymous with ethics, namely:

Susila (Sanskrit), more shows to the basics, principles, rules of life (sila) better (su). Virtue (Arabic), meaning the moral and ethical means science of morals.

• Understanding Ethics According to the Experts

There are some experts who express notions of ethics. Among them:

1.James J. Spillane SJ

Ethics is considering or pay attention to human behavior in a decision taken with regard to morals. Ethics is more directed to the use of human reason with objectivity to determine the truth or falsity as well as the behavior of one person to another.

2.DR. Franz Magnis Suseno

Ethics is a science that provides direction, benchmark and footing to human action.

3.Sidi Gajabla

Explain ethics as a theory of human behavior or actions in terms of good and bad can be determined by the extent to which human reason.

4.Bertens

Ethics are the moral values and norms are a reference for people individually or in groups to regulate all behavior.

5.Ahmad Amin

Argued that ethics is a science that explains the meaning of good and bad, and what should be done by humans, also expressed a goal to strive for man in his actions and shows the direction to do what it should didilakukan by humans.

• PRINCIPLES OF ETHICS  

In the history of human civilization since the fourth century BC thinkers have tried to define the various shades of ethical foundation to guide social life. Thinkers have identified at least there are hundreds of ideas the great (great ideas). The whole idea or the grand idea can be summarized into six principles that are an important cornerstone of ethics, namely beauty, equality, kindness, justice, freedom, and truth.

a) The principle of beauty

This principle underlies everything that includes the enjoyment of pleasure to beauty. Based on this principle, people pay attention to the values of beauty and want to show something wonderful in his behavior. For example in dress, spatial planning, and so making it more eager to work.

b) principle Equation

Every human being by nature have rights and responsibilities are the same, so it appears the demand to equality between men and women, racial equality and equality in various other fields. This principle underlies behavior diskrminatif on any basis.

c) principle of Goodness

This principle underlies the behavior of individuals to always seek to do good in their interaction with their environment. This principle is usually respect of human values such as respect- respect, compassion, helping others, and so forth. Humans by nature always want to do good, because by doing good he will be accepted by the environment. Governance and service provided to the public in fact aims to create the good of society.

d) Principles of Justice

The sense of justice is fixed and eternal willingness to give everyone what they should get. Therefore, this principle underlies a person to act in a fair and proportionate and do not take anything into the rights of others.

e) Principles of Freedom

Freedom can be interpreted as the freedom of individuals to act or not act according to his own choice. In the principle of life and human rights, every human being has the right to do things according to his own will does not damage or interfere with the rights of others. Therefore, every freedom should be accompanied by responsibility so that people do not take action arbitrarily to others. For that individual freedom here interpreted as:

1.the ability to do something or make a selection

2.capability that allows humans to doing his choice

3.the ability to account for his actions.

f) Principles of Truth

Truth is usually used in the logic of science that emerged from the ideas of logical / rational. Truth must be proven and shown that the truth can be believed by the individual and society. Not every truth can be accepted as true if it can not dibuktikan.Semua principles described it is a basic precondition in the development of ethical values or code of conduct in relations between individuals, individuals with society, government, and so on. Ethics is structured as a rule of law that will regulate people’s lives, communities, organizations, government agencies, and employees should really be able to ensure the creation of beauty, equality, kindness, justice, freedom, and truth for everyone.

• BASIS THEORY OF ETHICS

1.ethics Teleology

from the Greek word, t elos = goals, Measuring the merits of an action based on the goal would be achieved by the action, or based on the consequences caused by the action.

Two streams teleological ethics:

– Ethical Egoism

– Utilitarianism

a) Ethical egoism

The core view of selfishness is that the actions of each person basically aims to pursue personal and promote themselves. The only purpose of moral action everyone is the pursuit of personal interests and memajuka n himself. Selfishness is new becomes a serious problem when it tends to be hedonistic, ie when happiness and personal interests translated solely as physical pleasure that is vulgar.

b) Utilitari ani sme

derived from u l atin tilis which means “useful.” According to this theory of an act is good if it brings benefits, but the benefits it must involve not just one or two people, but society as a whole. In order thinking utilitari ani sme, the criteria for determining the merits of an act is “t he g reatest happiness of the greatest number”, the greatest happiness of the greatest number of people.

2.deontology

The term deontology comes from the Greek word ‘d eon’ which means the obligation. ‘Why is this good deed and the deed must be rejected as bad’, deontology replied: ‘because the first act is our obligation and for the second act prohibited’. The basis for the good or bad deeds is a duty. Deontological approach has been accepted in the context of religion, it is also one of the most important ethical theories.

3.Rights theory

In the thinking of today’s moral rights theory this is probably the most widely used approach to evaluate the merits of an act or behavior. Theory of Rights is an aspect of the theory of deontology, as it relates to liability. Rights and obligations are like two sides of the same coin. Rights based on human dignity and the dignity of all human beings are the same. Therefore, the right fits perfectly with the atmosphere of democratic thought.

4.Virtue Theory (Virtue)

looking attitude or character of a person. Do not ask whether a particular act is fair, or honest, or generous and so forth. The virtues can be defined as follows: disposition of character that has been acquired person and allows him to behave morally.

Example virtue:

1. Wisdom
2. Justice
3. Glutton for work
4. The good life

 

• SELFISHNESS

Egoism is a motivation to maintain and improve the view that only benefit themselves. Egoism means putting yourself in the middle of the goal and do not care about the suffering of others, including his beloved or who is considered a close friend. Another term is “selfish”. The opposite of selfishness is

Egoism is the way to maintain and improve a favorable view for himself, and generally have an opinion to improve one’s personal image and importance – intellectual, physical, social and others. This egoism does not see a concern for others and helping people in general and think only about themselves

This selfish has exceptional taste of the centrality of the ‘I am’ :. Their personal qualities Egotism means placing ourselves at the core of one’s world with no concern for others, including loved ones or considered as “close,” in any other way except that set by selfish.

Eogisme or egotism theory expressed by Friedrich Wilhelm Nietche which is an outspoken critic of utilitarianism and also strongly opposed the theory of social morality. Selfishness theory principle that everyone should be self, that is doing something that aims to benefit yourself. In addition, any act that benefits a good deed and a bad deed if it is self-inflicted.

The word “selfishness” is a term derived from the Latin that is ego, which is derived from the ancient Greek word – which is still used in modern Greek – ego (εγώ) which means “self” or “I”, and-ism, is used to demonstrate system of belief. Thus, the term is etymologically related very closely with philosophical egoism.

BAB 2

Business Environment Affecting the Ethical Behavior

1. The business environment affecting Ethical Behavior

The purpose of a small business is to grow and make money. To do that, it is important that all employees on board and that their performance and behavior contribute to the success perusahaan.Perilaku employees, however, can be influenced by external factors beyond the small business bisnis.Pemilik need to be aware of these factors and to view the changes in employee behavior that could signal a problem.

• Organizational culture

Overall corporate culture impacts how employees conduct themselves with colleagues, customers and suppliers. More than just the work environment, organizational culture includes management attitude towards employees, the company growth plans and autonomy / empowerment granted to the employees. “The tone at the top” is often used to describe the organizational culture of the company. positive tone can help employees be more productive and happy. A negative tone can lead to employee dissatisfaction, absent and even theft or vandalism.

• Local Economy

Seeing an employee of his work is influenced by the state of the local economy. If jobs are plentiful and the booming economy, employees are overall happier and their behavior and performance of the mirror. On the other hand, when times are tough and high unemployment, the employee may be afraid and anxious about holding their jobs. this anxiety leads to lower performance and irregularities in the assessment. in some employees, however, the fear of losing a job can be a motivating factor to do better.

• The company’s reputation in the Community

Employee perceptions of how their company is seen by the local community can affect behavior. If an employee realizes that his company considered fraudulent or cheap, actions may also be like that. It is a case of living up to expectations. However, if the company is seen as a pillar of the community with a lot of goodwill, employees are more likely to exhibit the same behavior as customers and suppliers expect that from them.

• Competition in the Industry

The level of competitiveness in an industry can impact the ethics of both management and employees, especially in situations where compensation is based on income. In a highly competitive environment, ethical behavior towards customers and suppliers can slip down as employees scramble to bring more jobs. in a stable industry where no problem attracting new customers, employees are not motivated to put aside their internal ethics to pursue the money.

2. interrelatedness – dependency between business and society

Nature has taught wisdom about how a harmonious relationship and interdependence that is very important. Earth where we stand, still loyal to cooperate and collaborate in teams and in teams with other planets, but most of the inhabitants had to walk on their own. Humans supposedly inheritors of the earth, felt it did not need other people. Interdependence is not fostered, but dependence continue to be carried.

Interdependence work based on relations of equality, egalitarianism. Humans cooperate, cooperate with each holding the principle of equality. Will not create a mutual help if people are believing in the superiority of self than others, whether it superiority of race, religion, ethnicity, economics etc.

States have been dominated by the type of people who have the mentality of traders. Shoots power has been transformed into a business area, where in the business world it is known is the master and slave, employer and worker. In this case, that created the climate dependency, instead of interdependence.

In other countries, the proletariat who once fought for, anyway after grabbing power, in turn, he transformed into a special class, the rigid criticism. Perverted law, and bui become a practical answer to the opposition. Proletarian make the same mistake with the bourgeois who resisted all-out.

In the last century, the Europeans coming from the Netherlands, England, Spain and Portugal to Asia including the country muasalnya aim to trade with the locals. They conduct business cooperation with locals and some of the ruling elite. Initially they enjoyed the role as partnerbisnis, gradually, this role is no longer considered attractive. They turn out to be an employer, and later colonize and enslave this nation for hundreds of years to maintain that position and create dependency locals to them.

Slavery is something that is not natural, violate destiny as human beings. Every human being is entitled to freedom. But the pattern of such slavery would not be timeless, although the shape was changed slightly to make it more civilized.

Such circumstances create unrest in the society due to hiperregulasi, because the level of compliance of the people declined. Security has become an expensive item. The departure of investors feeling insecure aggravate the Indonesian economy. In a state of collapse finally we have a high dependence to foreign countries.

3. Concern businesses to ethics

Businesspersons are required to be concerned with the state of society, not only in the form of “money” by making a donation, but more complex. This means that as an example of an opportunity that is owned by businesses to sell at a high price level when the excess demand should be the care and concern for businesses to not seize this opportunity to reap profits doubled. So, in a state of excess demand businesses should be able to develop and manifest the attitude of responsibility towards the surrounding society. Social responsibility can be in the form of concern for the surrounding community, especially in terms of education, health, provision of skills training, etc.

4. Developments in business ethics

Recognized that the history of the trade or business activity is never escape the scrutiny of ethics. Attention to business ethics can be said for the rest of the business itself. Deceptive acts in the business, reducing the scale or dosing, lie the concrete examples of the relationship between ethics and business. However, when looking at business ethics denikiansperti studied and practiced now, it is undeniable that there is a new phenomenon in which business ethics is of great concern and intense to be status as a field of scientific study that stands alone.

Future business ethics become a global phenomenon in the 1990s, business ethics has become a global phenomenon and has been a national, international and global as business itself. Business ethics has been present in Latin America, ASIA, Eastern Europe and other regions of the world. In Japan the active conduct of business ethics is the study of the Institute of moralogy on Reitakuuniversity in Kashiwa-Shi. In india business ethics practiced by the management center of human values established by the board of directors of the Indian Institute of Management in Calcutta in 1992.

In Indonesia alone at beberape colleges especially in graduate programs has taught courses usiness ethics. Besides popping up anyway organizations conduct special review of business ethics agencies is the study and development of business ethics Indonesia (LSPEU Indonesia) in Jakarta.

5. Business ethics and Accountant

In carrying out his profession an accountant in Indonesia are governed by a code of professional conduct by the name of the Indonesian Accountants Association code of ethics. Indonesian Accountants Association code of ethics is an order of ethical and moral principles that provide guidance to accountants to deal with clients, fellow members of the profession and also with the public. In addition to the code of ethics of accountants is also a tool or a means for clients, users of financial statements or the public in general, about the quality or the quality of services rendered as a series of ethical considerations as stipulated in the code of professional conduct.

Accounting as a profession have an obligation to ignore the interests of personal and professional ethics to follow predetermined. Obligations as a professional accountant has three obligations, namely; competence, objectivity and prioritize integrity. The case of Enron, xerok, merck, vivendi universal and bebarapa other similar cases have proved that ethics is indispensable in business. Without ethics in business, so of trade will not function properly.

We must recognize that accounting is a business, and the primary responsibility of business is to maximize profit or shareholder value. But if this is done without regard to ethics, then the result is very detrimental. Many people who run the business but remain of the view that, the business does not require ethics.

 

BAB 3

ETHICAL GOVERNANCE

• Governance System

The system of government is a system of a nation under his rule. In accordance with the conditions of each country, the system is divided into six, namely presidential, parliamentary, communist, liberal democratic, liberal, and capital. The system has a system of government and in order to maintain a stability of the country. But in some countries because of frequent acts of separatism is considered burdensome system of government of the people or harm the people. The system of government has a strong foundation which can not be changed and become static. If a government has an administration system that is static, absolute, then it will last forever until their insistence minorities to protest it. Broadly, it means the system of government was to maintain the stability of society, keeping the behavior of the majority or minority, keeping the foundation of government, maintaining the strength of political, security, economic security so that the system of government that is continuous and democracy that the public should be involved contributing to the development of the system tersebut.Hingga government currently only a few countries that can practice the government system as a whole. While narrowly, only as a means of governance system group to run the government in order to maintain the stability of the country in a relatively long time and prevent the reactionary and radical behavior of the people itself.

Corporate governance as a system requires a variety of devices, such as governance structure (governing body and management appointment) followed by the clarity of the rules (definition of rolesand powers as well as the code of conducts) in a form mekanaisme (governance mechanisms) that can be justified. In principle it is necessary to ensure the preservation of the interests of various parties associated with the company, so that with the passage of this mechanism, expected to result in continued impact positively on the economic development of a country to achieve prosperity of the community (the wealth of the nation) as a condition as defined by Adam Smith.

In practice there are several types of corporate governance system that developed in various countries. This reflects the differences in cultural traditions, legal frameworks, business practices, policies, institutional and economic environment in which the corporate governance systems are different it develops. Each system has its strengths and weaknesses of each, and various attempts have been made to explore the factors that make a system of corporate governance effectively and under what conditions, with the aim that the countries that are currently in transition from the economy of command toward the market economy can be an appropriate guide. Discussion of the various corporate governance system dominated by two key issues.First, whether the company should be managed with a single-board system or a two-board system. Second, whether the members of the Board (the Board of Commissioners and Board of Directors) should consist of the outsiders or more concentrated on insiders include, for example, a small number of financial institutions that lend to the company, other companies that have trade relations with suatuperusahaan, employees, managers, and others ,

• Ethical culture

The general opinion in the business that the company reflects the personality of its leader. The relationship between the CEO of the company culture is the basis of ethics. If the company should be ethical, top management must be ethical in all actions and words. Top management to lead by example. This behavior is ethical culture. How to apply ethical culture? The task of top management is to ensure that the ethical concept spread throughout the organization, through all levels and touch all employees. This is achieved through a three-layer method. First, set the company credo, a concise statement about the values upheld ethical company, which informed people and organizations both inside and outside the company. Second, establish ethics program. A system consisting of a variety of activities designed to direct the employee in performing the first layer. Eg orientation meetings for new staff and auditing ethics. Third, establish a code of ethics companies, each company has a code of ethics respectively. Sometimes these codes are adapted from the code of conduct of certain industries.

Corporate culture (corporate culture) is an evolving concept of knowledge management as well as industrial and organizational psychology. Sciences are trying deeper peel the use of the concepts of culture in the science of management and organizations with the goal of improving the performance of the organization, which in this case, is the organization of a corporation. DjokosantosoMoeljono defines corporate culture as a value system that is believed by all members of the organization and learned, applied and developed continuously, functioning as adhesive systems, and made reference to behave in organsisasi to achieve corporate goals that have been set. When studied in greater depth, according to Martin Hann, there are 10 (ten) parameters of good corporate culture, the pride of the organization, orientation towards (top) achievements, teamwork and communication, supervision and leadership, profit orientation and cost awareness, employee relationships , client and consumer relations, honesty and safety, education and development, and innovation.

• Develop Structure Corporate Ethics

Building a corporate entity and set targets. At that moment need the moral principles of ethics into the overall business activities implemented in both corporate entities, establish business goals, build a network with interested parties (stakeholders) as well as in the process of self-development of the businesses themselves. This implementation is expected to ethics can be the “conscience” in business processes in order to obtain an ethical business activity and have a heart, not just a mere profit-seeking, but also caring for the environment, society, and the interested parties (stakeholders).

Spirit to achieve good corporate governance has indeed been initiated in Indonesia, both in academics and practitioners in both the private and public sectors. A variety of devices supporting the formation of an organization that has good governance has been stimulated by the Government through the Company Law, Banking Law, Capital Market Law, Accounting Standards, Monitoring Committee for Business Competition, Corporate Governance Committee, and so that in principle is to make a rule that the company’s goals can be achieved through a mechanism of good governance by the board of commissioners, board of directors and management team. The formation of several structural devices companies such as independent directors, audit committee, remuneration committee, the risk committee, and secretary of the company are the appropriate steps to improve the effectiveness of the “Board Governance”.

With the company’s obligation to establish an audit committee, the board of directors can optimally exercise control and direction to the board of directors to work in accordance with the objectives of the organization. Meanwhile, the company secretary is an auxiliary structure of the board of directors of addressing the demands or expectations of various external companies such as investors in order to achieve company goals are not disturbed in both the time perspective the achievement of goals or quality targets to be achieved. Although it is not maximized, Feasibility and Capability (fit and proper test) conducted by the government to select top leadership of a state-owned company is an integral part of the need to build “Board Governance” is good so that the implementation of good corporate governance will become easier and fast.

• Code of Corporate Conduct (Corporate Code of Conduct)

The management company can not be separated from the rules of the game are always to be accepted socially, both the rule of law and moral or ethical rules. Code of Conduct is a guide for all businesses PT. Plantations in attitude and behavior to carry out daily tasks in interacting with colleagues, business partners and other parties concerned. Good image formation is closely linked to the behavior of the company to interact or connect with stakeholders. Real corporate behavior is reflected in the behavior of business actors. In regulating the behavior of this, companies need to certify in writing ethical values into policies and standards of conduct expected or even required for each actor business. Statements and pengkomunukasian the values outlined in the code of conduct.

Code of Conduct is the company’s internal guidelines containing Value Systems, Business Ethics, Work Ethics, Commitment, as well as the enforcement of the regulations for the individual companies in conducting business, and other activities and interact with stakeholders.

• Evaluation of the Corporate Conduct Code

To evaluate the initial stage (Diagnostic Assessment) and the preparation of guidelines. Code of Good Corporate Governance drawn up with the guidance of Tim BPKP and was inaugurated on May 30, 2005. There are 3 Principles of Good Corporate Governance in PT NindyaKarya (Persero). First, the decision-making comes from the corporate culture, ethics, values, systems, corporate work procedures, policies and organizational structure. Second, push for the development of the company, managing resources effectively and efficiently. Third, encourage and support corporate accountability to shareholders and other stakeholders. In implementing the Good Corporate Governance, required six instruments that support.

First, the code of corporate governance (Corporate Governance Code), guidelines for interaction between the organs of the Company as well as other stakeholders. Second, the code of conduct (Code of Ethical Conduct), guidelines for creating a harmonious working relationship between the company and karyawannya.Ketiga, board manual, a guide for commissioners and directors which includes membership, duties, obligations, authority and rights, board meetings, labor relations between commissioners on the board of directors and operational guidance for best practice. Fourth, risk management systems, mencakupprinsip principles on risk management and implementation. Fifth, an auditing committeecontract – arranges the organization and management of the auditing committee, along with itsscope of work. Sixth, the audit committee charter, governing the organization and functioning laksanakomite and scope of the audit.

 

BAB 4

Behavioral Ethics in The Accounting Profession

• CONDUCT ETHICS IN ACCOUNTING PROFESSION

ACCOUNTING PROFESSION AS & THE ROLE OF ACCOUNTING

The main interest of the accounting profession is to make users understand that accounting services accounting services performed at the highest achievement levels in accordance with the ethical requirements necessary to achieve the level of achievement. And all members bind themselves to respect the public trust. Public for the trust given to him, members must continually demonstrate their dedication to achieve a high level of professionalism. To maintain and enhance public confidence, each member must fulfill their professional responsibilities with the highest possible integrity.

Role of Professional Accountants:

Accountants is an independent business advisor. Accountants can offer various services. Accountants may be registered auditor, can set the client’s accounting system, could become advisors on tax planning, or detectors fraud and evasion, can perform budgeting and financial statement analysis, advise clients on financing decisions, provide specialized knowledge and can help maintain environmental ethics.

• PUBLIC EXPECTATIONS

Communities are generally perceived as professional accountants in accounting. This means that they have something more in the field of intelligence that is compared to the layman.

In addition, people also hoped that the accountants comply with the standards and values prevailing environment of the accounting profession, so that people can rely on the belief in a given job. Thus an element of trust plays a very important in the relationship between the accountant and the interested parties.

• ETHICAL VALUES VS ENGINEERING ACCOUNTING / AUDITING

Integrity: actions and words showed his profession perpetrators of transparency, honesty and consistent.

Cooperation: has the ability to work alone or in teams

Innovation: professional actors were able to add value to the customer and work processes with the new method.

simplicity: professional actors capable of providing solutions to any problems that arise, and complex problem becomes simpler.

Accounting techniques (accounting technique) is a rule specific rules derived from the principles that explain transaction accounting transactions and events specific events faced by the accounting entity

• CONDUCT GIVING SERVICE ETHICS IN PUBLIC ACCOUNTANTS

Every public accountant as the members of the Indonesian Institute of Accountants and professional staff (both are members of Certified and non-members IICPA) working on a Public Accounting Firm (KAP) should apply Ethics Rules Compartment public accountant or now referred to as the Code of Professional Ethics of Certified Public Accountants in performing their duties as a giver jasa.Kode Indonesian Institute of Ethics is intended as a guide and rules for all members, whether practicing as a public accountant, worked in the corporate world, in government agencies, as well as in the world of education in fulfilling their professional responsibilities.

Indonesian Institute of Accountants Code of Ethics consists of three parts:

(1) Principles of Ethics, provides the basic framework for Ethics Rules, which regulates the implementation of the provision of professional services by the member. Principles of Ethics was passed by Congress and apply to all members.

(2) Rules of Ethics, approved by the Meeting of the Association Members and only binds members of the Association concerned.

(3) Interpretation of Rules of Ethics, an interpretation issued by the Agency established by the Association after considering feedback from members, and other interested parties, as a guide in the application of ethics rules, without intended to limit the scope and application.

enterprises in a developing country such that it does not just need the capital from its owners, but began to require capital from lenders, and if it arises various companies form limited liability company whose capital comes from the community, public accounting firm start is required and develop. Of the public accounting profession is public creditors and investors expect an impartial independent assessment of the information presented in the financial statements by management of the company. Public accounting profession produces a wide range of services to the people, namely service assurance, attestation services, and services nonassurance. Service assurance is an independent professional services that improve the quality of information for decision makers. Attestation services consist of audit, inspection (examination), review, and agreed procedures (the agreed upon procedure). Attestation services is a statement of opinion, consideration of an independent and competent person on whether the assertion of an entity in accordance in all material respects, with the criteria established. Nonassurance services are services produced by a public accountant in which he did not give an opinion, negative beliefs, a summary of findings, or other forms of belief. Examples nonassurance services produced by the public accounting profession is a compilation services, taxation services, consulting services.

In general auditing is a systematic process to obtain and evaluate evidence objectively about the state of economic events, with the aim to establish the level of concordance between the statement with the established criteria, as well as the delivery of the results to the user concerned. The terms of the independent auditor, auditing is an objective examination of the financial statements of a company or other organization with the goal to determine whether the financial statements present fairly the financial condition and results of operations of the company or organization.

Public accounting profession is responsible for raising the level of reliability of the financial statements of these companies, so that the financial community obtain reliable financial information as a basis for deciding the allocation of economic resources.

 

http://www.seputarpengetahuan.com/2015/10/15-pengertian-etika-menurut-para-ahli-terlengkap.html

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