Introduction to Accounting - Chapter 3: Skills, Knowledge and Ethics

Vocabulary-style flashcards covering the roles, skills, knowledge, strategic frameworks, and ethical principles of professional accountants as described in Chapter 3.

Insolvency

A financial condition experienced by a business when it can no longer meet its financial obligations when they become due.

Insolvency practitioner

Individuals appointed to protect the creditors of an insolvent individual or business and, if possible, to rescue the business.

Bankrupt

The term normally used to describe sole traders who become insolvent; by convention, companies are described as insolvent rather than this term.

Business adviser

The role often assumed by external accountants for sole traders, encompassing tax returns, establishing financial positions, and offering management accounting services.

Chartered accountancy bodies

The six professional accountancy bodies in the UK that have received a Royal Charter, ensuring their members are professionally qualified and regulated.

The Association of Chartered Certified Accountants (ACCA)

One of the five chartered accountancy bodies in the UK that caters for both the private and the public sector.

The Chartered Institute of Public Finance and Accountancy (CIPFA)

A UK chartered accountancy body that specialises specifically in the public sector.

Certified Public Accountants

The title used for professionally qualified and regulated accountants in the USA.

Active listening

A communication skill involving giving full attention to what a client or colleague is saying and knowing when and how to ask appropriate questions.

Written comprehension

The ability of an accountant to read and understand information and ideas presented in writing.

Critical thinking

The ability to use intuition, logic and reasoning to identify the alternative approaches to solving problems.

Adaptability

The ability to change effectively in response to a dynamic environment.

Monitoring

The skill to assess your own performance and others in order to continually improve.

Information ordering

The ability to arrange things or actions in a correct order according to stipulated rules.

Human resource management

A field concerned mainly with the recruitment, selection, training and motivation of staff.

Strategic management

The continuous process of determining, implementing and evaluating decisions that enable an organisation to achieve its long-term objectives.

PESTLE framework

A tool for analysing the external environment of a business, denoting Political, Economic, Social, Technological, Legal and Environmental factors.

International Ethics Standards Board for Accountants (IESBA)

An organization supported by the International Federation of Accountants (IFAC) that requires professional accountants to comply with fundamental ethical principles.

Integrity

An ethical principle where a professional accountant is straightforward and honest in all professional and business relationships.

Objectivity

An ethical principle where an accountant does not allow bias, conflict of interest or undue influence of others to override professional judgements.

Professional competence and due care

The duty to maintain professional knowledge at the required level and act diligently in accordance with technical and professional standards.

Confidentiality

The obligation to respect the privacy of information acquired through professional relationships and not use it for personal advantage.

Professional behaviour

The requirement to comply with relevant laws and regulations and avoid any action that discredits the profession.

Bean counter

A limited stereotype of a professionally qualified accountant as someone who only provides plain financial information based on the logic of double-entry accounting.