Ethical standards must be addressed, say Europe's accountants
Ethical standards in the market place are being addressed by the European Federation of Accountants (FEE) as the organisation stresses the importance of a principles-based approach for participants in the financial reporting chain. According to the FEE the chain includes company directors, investment bankers, investment analysts and business journalists.
The ethical approach, according to FEE president David Devlin, will protect the public interest more than a detailed, rules based approach, largely because a conceptual approach prevents the use of legalistic devices to avoid regulatory compliance.
Devlin adds: “The combination of rigour and universal scope of the conceptual approach is the most satisfactory way of ensuring that ethical requirements for auditors, standard setters, regulators and others in the financial reporting chain are fully observed in the rapidly evolving modern global economy.
“Corporate management and boards of directors, who have the prime responsibility for financial reporting, as well as auditors, standard setters, regulators and other participants in the reporting process such as lawyers, investment bankers, investment analysts and credit-rating agencies, all have important roles to play and improvements to make to enhance the credibility of financial reporting.”
The pronouncement by the FEE is in response to the growing number of corporate scandals in recent years and hopes to reaffirm ethical integrity to financial reporting.