Integrity and Objectivity

Ethical Principles in Accounting

Standards that must be applied to all

activities performed by an accountant, specifically relevant when handling VAT and payroll matters.

Integrity

An ethical principle requiring accountants to be straightforward, honest, and fair in all VAT and payroll transactions.

Objectivity

The ethical requirement to remain unbiased and not allow external pressure to influence professional judgment in tax matters.

Handling Pressure to Reclaim VAT

An accountant must act with integrity by refusing to reclaim input VAT on non-allowable expenses, regardless of internal pressure.

Company Car with Private Use

A specific example of a non-allowable expense where an accountant must maintain objectivity and refuse to reclaim input VAT despite pressure.

Integrity in Payroll

The duty to register all employees on the payroll system to comply with legislation, even if pressured to pay 'cash in hand'.

Consequences of

'Cash in Hand'

Payments

A breach of payroll legislation that dishonestly avoids NIC and pension contributions while increasing employee

'take home pay'.

Professional Competence and Due

Care

The requirement for accountants to stay fully up to date with relevant legislation and refer queries to more experienced colleagues.

Maintaining Honesty

A core aspect of integrity where the accountant must not engage in reclaiming

VAT on items not permitted by law.

Internal Pressure

Influences within a business that might challenge an accountant's

objectivity regarding tax and payroll regulations.

Fair Treatment of Transactions

The application of integrity to ensure every VAT and payroll transaction is processed honestly and correctly.

Ethical Conflict Resolution

The process of referring legislation queries internally or to external accountants to maintain professional standards.

Professional Behavior

The ethical obligation to comply with legislation to avoid bringing the accounting profession into disrepute.

Continuous Professional Development (CPD)

A method used to maintain professional competence and ensure the accountant is aware of current tax and payroll laws.

Objective Decision Making

The ability to choose the lawful path for VAT reclamation without being swayed by the desires of the business owners.

Legislative Compliance

Acting with integrity by adhering to the Value Added Tax Act and annual finance acts without making dishonest adjustments.

External Accountant Consultations

A step taken to ensure due care and

competence when internal knowledge is insufficient to resolve complex tax issues.

Resisting Dishonesty

A fundamental requirement of integrity where the accountant refuses to engage in illegal 'cash in hand' payroll practices.

Honesty in Reporting

Providing accurate and truthful information to

HMRC in both VAT returns and payroll submissions.

Self-Serving vs. Guidance

Accountants must seek clarification from

HMRC or senior colleagues rather than making biased assumptions to benefit the business.