5 Fundamental Accounting Principles
The integrity guideline imposes upon us, professional accountants, a duty of straightforwardness and honesty at all times. It prevents our work from being corrupted by self-interest or the interest of other parties. An accountant is required to disassociate him/herself from any documents that contain:
- Intentional material misstatement
- Improperly furnished information
- Misleading information
Once we become aware of any of the conditions mentioned, we shall take the necessary steps to disassociate ourselves from such information. To prevent breaking any law or guidelines, we shall write a report in regards to any information that forced us to disassociate ourselves.
Objectivity prevents all professional accountants from compromising high professionalism and judgment based on bias, personal conflicts, and peer pressure. Objectivity tells a professional accountant to focus on the task and nothing else. If for any circumstance, any biases, personal conflicts, or peer pressure arises from and towards us, we shall not continue forward with the service. Peer pressure can come in the form of other individuals within an organization trying to influence the auditor from overlooking certain aspects of the financial statements. A bias can be seen as a professional accountant having negative views about a company that is known for having committed fraudulent acts in the past.
Professional Competence & Due Care
This principle prevents us from providing a low-quality or incompetent service and to act in accordance with the generally accepted accounting principles (GAAP) as well as with other technical standards. “Competent professional service” means using the education provided by both school and the work field to provide a service that provides value to you. To be able to provide you with competent service, we need to continue our education throughout the years and stay up-to-date with all accounting principles and standards. We’ll notify you of any limitations in our capabilities regarding any task that you’d inquire from us and whether we can do it with professionalism and diligence.
Confidentiality not only means to keep all information private but to do everything within our power to keep the information private. Some professional accountants work differently, but for us, the mere fact of you hiring us is considered private information. We don’t disclose any information outside of the individuals and/or parties involved and we don’t use any confidential information to our advantage or the advantage of a third-party. Also, as professional accountants, we’re not allowed to state any information as false or untrue, if from another source, we found the truth. When that happens, we shall take the proper procedures and enquire within the company to corroborate the information. We maintain confidentiality even after our work is done.
We shall not engage with any behavior that doesn’t follow the law and the ethical guidelines that all accountants must follow. We should treat all parties associated with respect and courtesy at all times during the time of our work and afterward. Even in the event of promoting ourselves, we shall not make any exaggerated claims about the qualification and experience we have gained for the services we offer or compare ourselves with the work of others.