(c) insider dealing. (5 marks)
(c) insider dealing. (5 marks)
发布时间：2025-02-03 06:46:47
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答案：官方提供(c) Insider dealingExplanation of termInsider dealing means using ‘inside information’ (i.e. price-sensitive information relating to the issuer of securities) to gainadvantage when ‘dealing’ (i.e. acquiring or disposing) in securities.Ethical risksInsider dealing is a potential area of conflict and contention for accountants in industry and commerce (i.e. employedprofessional accountants) in particular (because of their exposure to price-sensitive information).Acts of insider dealing contravene the fundamental principles of integrity and confidentiality:■ integrity – a professional accountant should be honest;■ confidentiality – a professional accountant should respect the confidentiality of information acquired during the courseof performing professional services and should not use or disclose it without proper and specific authority.Professional accountants in public practice who become privy to price-sensitive information will similarly be in breach of theirduties of integrity and confidentiality if they get involved in insider dealing. Also, the reputation of individual practitioners andtheir firms may be put at risk by allegations of insider dealing even though they have no involvement with the practice. Forexample, if an auditor does not detect when an entity’s management is involved in insider dealing.Sufficiency of current ethical guidanceRelevant current ethical guidance, that is covered by the principles of integrity and confidentiality, is sufficient to explain theethical risks of insider dealing but cannot prevent its practice. Even where there are laws to prosecute insider dealing,penalties (such as seven years in jail and/or unlimited fines) have been ineffective in combating insider dealing.
