ICAS – Ethical Decision-Making Framework

According to the Institute of Chartered Accountants of Scotland (ICAS), “There has been a lot in the media recently about Artificial Intelligence (AI). One of the most difficult tasks for any AI designer will be to replicate the ability to place ethical considerations into the decision-making process. Whilst this might be easier for certain aspects, such as determining compliance with a set of rules on auditor independence, it will be much trickier in other areas where a real understanding of the circumstances, and possible available courses of action, is required.”

The ICAS has prepared guidance for those faced with such dilemmas by publishing a Discussion Paper on Ethics Principles and an Ethical Decision-Making Framework. To learn more, read the ICAS discussion paper, The Five Fundamental Ethics Principles: Time for Evaluation? and the ICAS guidance on an Ethical Decision-Making Framework. In addition, review the guidance entitled, What Do You Do Now? Ethical Issues Encountered by Chartered Accountants, and the ICAS ethical dilemmas series called Shades of Grey.

New ICAS survey: Principles not Rules

Is the principles not rules debate still valid in today’s corporate reporting landscape? What are the challenges in implementing principles-based standards? These were some of the questions for debate at an ICAS event to mark the 10 year anniversary of the 2006 publication of 'Principles not Rules: A question of judgement'.

The Institute of Chartered Accountants of Scotland (ICAS) recently surveyed members with an interest in corporate and financial reporting on their views on this debate. A similar survey was undertaken in 2011. 

Of the 199 respondents to the survey, the key findings were as follows:

• 90% of respondents had a preference for principles;

• 64% believe IFRS is very or mainly rules-based;

• 61% think that IFRS has become more rules-based in the last five years;

• There was very strong support for the idea that the profession is capable of operating within a principles-based environment;

• The main barriers to principles-based standards were considered to be:  the influence of US GAAP; the role of regulators in challenging judgments; the threat of litigation; and the lack of trust in preparers and auditors.. 

For a summary of the full results of this survey, see ICAS survey: Principles not Rules. To learn more, refer to previous postings about the principles versus rules debate.