ZIMSEC O Level Principles of Accounting: Introduction to Business Ethics

  • History has shown that accountants occupy an important within the organisation
  • The financial well being is of fundamental importance to all stakeholders
  • Unlike other employees of the organisation an accountant’s responsibility is not exclusively to satisfy the needs of an individual client or employer
  • He/She need not blindly follow the commands of his/her employer or other parties
  • For this reason those who work in the accounting profession ought to act in the public interest in all their endeavours
  • Accountants are tasked by various laws, regulations and standards to act ethically in conducting their operations
  • Acting ethically involves observing and adhering to ethics
  • Ethics are defined as the moral principles that govern a person’s behaviour or the conducting of an activity
  • What exactly constitutes ethical behaviour or the exact nature of varies
  • Usually ethics are explicitly set out in various places including:
    • The law for example the Companies Act
    • Professional Accounting Boards such as ACCA, ICAZ and CIMA have their own codes of conduct
    • The International Accounting Standards/International Financial Reporting Standards
    • The relevant Organisation’s own Code of Conduct
  • Despite the differences in the actual code of conduct that has to be followed
  • In general acting ethically means an accountant should comply with the following fundamental principles:
    1. intergrity
    2. objectivity
    3. Professional competence and due care
    4. Confidentiality
    5. Professional behaviour/Professionalism
  • At the heart of ethics is the concept of compliance
  • An accountant must comply (follow) set ethical guidelines
  • In addition an accountant must take note of any impediments/threats that might cause him/her not to comply with set ethical guidelines and take appropriate action to ensure that they are able to comply
  • An example of a threat to ethical behaviour is conflict of interest for in such cases the accountant may recuse himself/herself
  • Below we will now define and look at the meaning of each of the above listed principles


  • It involves strict adherence to ethics without wavering or exception
  • To demonstrate this an accountant should be straightforward, honest and truthful in all professional and business relationships
  • Acting with integrity means for example an accountant will not endorse or give  information that they believe is materially false or to give misleading statements, to lie by  omission
  • For example an account must not prepare or endorse financial statements that he/she know don’t show a true and fair position of the business


  • An accountant should strive (as far as possible or practicable) to reduce or eliminate biases, prejudices, or subjective evaluations by relying on verifiable data
  • Not allowing bias, conflict of interest or the influence of other people to override your professional judgement involves for example relying on verifiable source documents when collecting and presenting financial information and data, dealing with cases of conflict of interest etc


  • An accountant is required to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques and act diligently and in accordance with applicable technical and professional standards
  • This means an accountant must constantly appraise themselves of any changes in accounting terms, rules and regulations to ensure that they can do their job
  • This might mean obtaining new necessary qualifications for example


  • An accountant is required to respect the confidentiality of information acquired as a result of professional and business relationships and, therefore, not disclose any such information to third parties without proper and specific authority, unless there is a legal or professional right or duty to disclose, nor use the information for the personal advantage of the accountant or third parties (e.g. friends)
  • What this means is that an accountant is required to keep confidential any material that they handle in the course of their jobs
  • This does not apply however for example when such information shows the business is breaking the law


  • An accountant is supposed to comply with relevant laws and regulations
  • That is they are require to act in a professional manner
  • Accounts must also avoid any action that could negatively affect the reputation of the profession
  • This naturally involves carrying out their duty in a competent and proficient manner


Ethics involve a lot of legal terms that may be difficult to understand, students are exhorted to read these notes carefully and more than once in order to grasp the meaning of these terms. If you want a future in accounting you have to understand this material as it is at the core of the accounting profession. Indeed the language used here is often used in material such as Accounting and Auditing standards

To access more topics go to the Principles of Accounts Notes.