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News Report

International

Revised Ethics on Confidentiality and Low-Balling
The International Federation of Accountants has revised its Code of Ethics for Professional Accountants to include information on the disclosure of confidential information, underbidding competitors and employing non-accountants. The ethics code also was modified to reinforce its role as a model for national accounting and auditing guidance around the world.

The revised code explains that professional accountants must respect the confidentiality of their clients or employers affairs. According to the code, confidentiality should be overridden only when professional, legal or ethical requirements call for public disclosure of information.

The code examines the practice of underbidding a competitor to secure an audit client. The concern is that, as a result of a lower fee, accountants may be tempted to reduce the quality of the work they carry out. Revisions in the code make it clear that an accountant who has obtained work at fee levels significantly lower than those charged or quoted by other accountants must not compromise the quality of an audit.

A copy of the revised code of ethics can be obtained by contacting IFAC at 212-302-5952 or by visiting the IFAC Website at www.ifac.org.

New Paper on Performance Reporting
A group of international accounting standards setters issued a discussion paper on reporting financial performance. The FASB, the IASC and the accounting standards boards in Australia, Canada, New Zealand and the United Kingdom were involved in the special project.

The paper, Reporting Financial Performance: Current Developments and Future Directions, surveys the similarities and differences in the reporting or presentation of profit or income in use around the world. For example, recent financial reporting standards issued by the U.K.s ASB, New Zealands Financial Reporting Standards Board, the FASB and the IASC all required

The income statement to be supplemented by another statement that includes some reporting of financial performance.
Financial performance to be reported on an all-inclusive basis (all gains and losses must be reported as a part of the financial performance).
Inclusion of a total, or overall summary measure, of financial performance (except for the IASCs standard).

The paper is the sixth in a series of studies promoting harmonized international accounting standards.

Copies of the report (code: SRRFP) are available for $11.50 each from the FASB order department at 203-847-0700, ext. 555.