CODE OF ETHICS FOR ACCOUNTANT(In order to accomplish Professional Ethics for Accountants assignment)

Group 7 :

Jaka Maulana

8335120524

Nida Annissa

8335123519

Puji Astuti

8335123550

S1 Accounting Reguler B 2012

FACULTY OF ECONOMICS

STATE UNIVERSITY OF JAKARTA

2015

PREFACEPraise be to Allah, the cherisher and sustainer of the worlds, God who has been giving His blessing and mercy to the authors to complete the paper entitled CODE OF ETHICS FOR ACCOUNTANT.

In finishing this paper, the authors really give their regards and thanks for people who has given guidance and help, they are :

1. Mrs. Marsellisa Nindito, as the Professional Ethics for Accountant lecturer, who has given her best guidance to writes a report.

2. Our friends and our parents, who always give their supports.

Finally, the authors realize there are unintended errors in writing this report. The authors really allow all readers to give their suggestion to improve its content in order to be made as one of good examples for the next paper. Hopefully, this paper can be usefull for readers and expanding horizons. Thank you.

Jakarta, 9th April 2015

Authors

CONTENTiPREFACE

iiCONTENT

CHAPTER I 1INTRODUCTION

CHAPTER II 3DISCUSSION

32.1.INSTITUT AKUNTAN INDONESIA (IAI)

32.1.1.History of IAI

42.1.2.Congress and The Previous Chairman of IAI

72.1.3.Membership

82.2.THE STRUCTURE INDONESIAN INSTITUTE OF ACCOUNTANTS ETHICS

102.3.ETHICAL PRINCIPLES OF IAI

172.4.CODE OF ETHICS FOR ACCOUNTANTS: INTERNATIONAL FEDERATION OF ACCOUNTANTS (IFAC)

172.5.STRUCTURE AND FRAMEWORK OF THE IFAC CODE OF ETHICS

202.6.FUNDAMENTAL PRINCIPLES

222.7.RELATION OF ETHICAL PRINCIPLES IAI AND THE PRINCIPLES OF ETHICS IFAC

CHAPTER III 24VIOLATIONS OF THE CODE OF ETHICS

243.1.THE CASE

273.2.CASE ANALYSIS

CHAPTER IV 32CONCLUSION

iiiBIBLIOGRAPHY

CHAPTER I

INTRODUCTIONThis time which can be referred to as accountants are those who have graduated from Stratum 1 (S1) of accounting courses and has earned accounting profession through education accounting profession held by some universities that have received permission from the Departemen Pendidikan Nasional on the recommendation of the organization Indonesian Institute of Accountants profession.

Until now, there have been at least three classes of work that can be cultivated by an accountant, as a management accountant, internal auditor, and public accountant. There are still mistakenly understood that the accounting function is only needed by the organization-oriented company profit achievement. Whereas, government organizations and non-profit oriented organizations also require accounting functions, as important as accounting function in company organization. In the organizational structure of the Republic of Indonesia, there are a high state institutions, government agencies, departments, and units of work under the department. All of these institutions require accounting functions assigned to record and create financial reports, at least as an accountability tool.

The whole accountants in Indonesia shelter in a professional organization called the Indonesian Institute of Accountants (IAI). In compliance with increasing specialization areas can be cultivated by the accountant, it also formed sub-professional organizations such as Indonesian Institute of Public Accountants, Indonesian Institute of Management Accountant, Indonesian Institute of Public Sector Accountants, and Indonesian Institute of Education Accountants.

The work of the accountant can be called a profession because: (1) require knowledge of accounting and / or other relevant of disciplines (2) require skills in data processing and presenting the financial statements and (3) must have the attitude and ethical behavior (attitude).

Currently accounting profession in Indonesia is following competency standard that used in US. However, the tendency of the system to the incorporation of the world economy, the entire accounting profession in the world, have to support the direction of the unification of the global economic system.

Realizing this, the officers and members of IAI have discussed about readiness of IAI to adopt technical standards and international code of ethics by utilizing a variety of forums, such as congresses, seminars, workshops, training and e.t.c. The latest news, IAI officials determined as soon as possible the accounting profession in Indonesia to adopt the technical standards and conduct was issued by the International Federation of Accountants (IFAC).CHAPTER II

DISCUSSION2.1. INSTITUT AKUNTAN INDONESIA (IAI)2.1.1. History of IAIAt the time of Indonesia's independence, there is only one accountant native whose name Prof. Dr Abutari, meanwhile Prof. Soemardjo graduate accountant education in the Netherlands in 1956.

The first graduate accountants in Indonesia's are Basuki Siddharta, Hendra Darmawan, Tan Tong Djoe, and Go Tie Siem, they pass the mid-1957's. Together with Prof. Soemardjo, they are took the initiative of establishing associations accounting for the Indonesian nation. The reason, they may not be members of NIVA (Netherlands Institute Van Accountants) or Vaga (Vereniging Academisch Gevormde Accountants). They realize Indonesia and argued that the two institutions may not be thinking about the development and coaching Indonesias accountant.

On Thursday, October 17th, 1957, they had held a meeting in the auditorium of the University of Indonesia (UI) and agreed to establish an association of accountants Indonesia. Because the meeting was not attended by all accountants, so they decided to form the Preparatory Committee for the Establishment of Accountants Association of Indonesia. The committee was asked to contact the other accountants to ask their opinion. In the Committee, Prof. Soemardjo as chairman, Go Tie Siem as a writer, Basuki Siddharta as treasurer while Hendra Darmawan and Tan Tong Djoe as commissioner. The letters were sent by committee said that the other 6 accountant was agreed as the reply.

Associations were finally named Indonesian Institute of Accountants (IAI) finally established on December 23, 1957, which is the third meeting held in the auditorium of the UI at 19.30.The first board of management consists of:Chairman: Prof. Dr. Soemardjo Tjitrosidojo

Registrar: Drs. Mr. Go Tie Siem

Treasurer: Drs. Sie Bing Tat (Basuki Siddharta)

Commissioner: - Dr. Tan Tong Djoe

- Drs. Oey Kwie Tek (Hendra Darmawan)

Chairman: Prof. Dr. Soemardjo Tjitrosidojo

The Sixth other accountant as the founder of the IAI is:

1. Prof. Dr. Abutari

2. Tio Po Tjiang

3. Tan Eng Oen

4. Tang Siu Tjhan

5. Liem Kwie Liang

6. The Tik Him

The concept of the first Statutes IAI completed on May 15, 1958 and the final draft was completed on October 19, 1958. Menteri Kehakiman ratified on 11 February 1959. However, the date of establishment of the IAI is set at 23 December 1957. At that time, the goal of IAI is:1. Guiding the development of accounting and enhance the quality of accounting education.2. Enhancing the quality of work accountant.

2.1.2. Congress and The Previous Chairman of IAI

KongresTahun/TempatTemaKetua

1957-1963Prof. Dr. Soemardjo Tjitrosidojo

I-IV1963-1986Radius Prawiro

V-VI1986-1994Subekti Ismaun

VII1994-1998Soedarjono

VIII1998 di JakartaIntrospeksi dan Transformasi Profesi Akuntan Memasuki Milenium Baru.Zaenal Soedjais

KNA dan KLB2000 di JakartaPradigma Baru profesi Akuntan Memasuki Milenium Ketiga: Good Governance-

IX2002 di JakartaPemantapan Profesionalisme Akuntan dalam Perubahan Lingkungan GlobalAhmadi Hadibroto

KLB2003 di BandungPeran Profesi Akuntan Merespons Kebutuhan Peningkatan Transparasi-

X2006 di JakartaTowards a Greater Transparency and AccountabilityAhmadi Hadibroto

KLB2007 di JakartaPeran Akuntan Dalam Meningkatkan Daya Saing Bangsa-

XI2010 di JakartaPeran Akuntan dalam meningkatkan nilai tambah bagi perekonomian nasional dan globalMardiasmo

KNA dan KLB2012 di YogyakartaTransformasi Good Governance dari Kepatuhan Menuju Budaya-

IAI intends to raise the potential of Indonesian Accountants to be activator of national development in realizing a fair and prosperous society based on Pancasila and UUD 1945. IAI aims to develop and leverage potentialof Indonesias accountant to form a copyright to devotion for the benefit of the nation and the State. IAI serves as a communication medium that bridge the various background tasks and dedication to the field of cooperation that is synergy in harmony, balance and harmony.

To achieve the goals, objectives, and functions, IAI perform a variety of activities including registration and membership services; development and preparation of financial accounting standards; development and enforcement of codes of conduct accountant; consultancy for the development of small and medium enterprises and cooperatives; publications; international relations; become the center of knowledge and the development of accounting; maintain and improve the competence of accountants through education and training; perform certification in accounting as a benchmark quality standards of professionalism; and maintain the confidence of service users and the wider community on the work of professional accountants who are members of IAI.

Statutes and Bylaws (AD ART) IAI has been amended several times, most recently assigned to the ART AD Extraordinary Congress (KLB) IAI dated June 27, 2012 as Keputusan Sidang Pleno Tetap KLB IAI Tahun 2012 Nomor: 05/Kongres Luar Biasa/IAI/VI/2012.Currently IAI is the only container that represents the Indonesian accounting profession as a whole. IAI is a member of the International Federation of Accountants, accountant's professional organization representing over 2.5 million accountants who take shelter in the 167 associations spread accounting profession in 127 countries. As a member of IFAC, IAI has committed to implement all international standards for high quality and strengthening the accounting profession in Indonesia. IAI is a member and also a founder of the ASEAN Federation of Accountants (AFA). This time IAI become permanent secretariat AFA.2.1.3. Membership

At first IAI membership is geared to individuals who choose the appropriate compartment members working field. IAI members joined in 4 (four) Compartment IAI formed at that time, namely IAI Compartment Public Accountants (IAI KAP), IAI Compartment Educators Accountants (IAI Regional Library of Aceh), IAI Compartment Management Accountants (IAI KAM), and the Public Sector Accounting Compartment IAI ( IAI KASP).

On May 23, 2007 IAI implement Kongres Luar Biasa (KLB) which decides IAI is an organization profession which consisting Individuals and associations.

IAI KAP changing the format to become independent public accountants association with the name of Indonesian Institute of Certified Public Accountants (IAPI) on 24 May 2007. IAI KAP was dissolved in accordance DPN IAI on June 4, 2007 Nomor Kep-22/SK/DPN/IAI/V/2007. Furthermore IAPI at the same time confirmed as a member of the association IAI in accordance DPN IAI on June 4, 2007 nomor Kep-23/SK/DPN/IAI/V/2007.IAI KAM also changes the format into an independent association with the name of the Institute of Management Accountants Indonesia (IAMI). On September 1, 2009 IAI KAM dissolved, and IAMI set to become an associate member of IAI according decree IAI DPN nomor Kep-72/SK/DPN/IAI/IX/2009.At the time of the XI Congress of the IAI held December 10, 2012, DPN IAI period 2010-2014 was given the mandate to review the proposed changes to the membership of IAI and the authority to determine the next action.

IAI's Kongres Luar Biasa held on June 27, 2012 with the decision of the IAI is a professional organization whose members are individuals, consisting of the Main Members, Associate Members, and Young Members.

2.2. THE STRUCTURE INDONESIAN INSTITUTE OF ACCOUNTANTS ETHICSThe purpose of the accounting profession is to fulfill the responsibilities with the highest professional standards and achieve the highest level of performance with an orientation to the public interest. To achieve these objectives, there are four basic requirements that must be met, namely:

1) Credibility. Society needs the credibility of information and information systems.

2) Professionalism. Required individuals that can clearly be identified by users the accountant service, as professionals in the field of accounting.

3) Quality of Service. The presence of the belief that all services obtained from the accountant is given by the highest performance standards.

4) Trust. Accountant service users should be able to feel confident that there is a framework of professional ethics that underpin the provision of services by accountants.

The code of ethics is a system of norms, values and professional rule written explicitly stating what is right and good, and what is not true and is not good for the professionals. Code of Conduct states what actions are right or wrong, what actions should be done and what should be avoided. The purpose of professional codes of ethics is providing the best possible services to users or customers. The existence of a code of conduct will protect unprofessional conduct.

The structure of the code of conduct IAI consists of four sections which are based on hierarchy, namely:

1) Principles of Ethics

Principles of the Code of Professional Ethics IAI stated profession recognition of their responsibilities to the public, service user accountant, and colleagues. This principle guides the members to fulfill their professional responsibilities and the basic foundation of ethical behavior and professional conduct. This principle asks for a commitment to behave honorably, even with sacrifice personal gain.

2) Rules of Ethics

Ethics rules further elaboration of the principles of ethics and set for each compartment. For public sector accountants, ethical rules set by the Public Sector Accounting Compartment IAI (IAI-KASP). Until now, these rules of ethics still in the form of the exposure draft, the formulation refers to the Standard of Professional Practice on Ethics issued by the International Federation of Accountants (IFAC).

3) Interpretation of Rules of Ethics

Interpretation the Rules of Ethics is an interpretation issued by a corporation which established by the Association after considering feedback from members, and other interested parties, as a guide in the application of the Code of Ethics, without intended to limit the scope and application. Currently, Statement of Professional Ethics can be used as a rule of interpretation and Ethics or until the issuance of a new interpretation of the rules and replace it.

Compliance with the Code of Conduct, as well as all the standards in an open society, depends primarily on understanding and voluntary actions of members. In addition, compliance members also determined by coercion by fellow members and by public opinion, and in the end by the processing mechanism Code violations by the organization, if necessary, against members who do not stick to it.

4) Q & Ethics

At the lowest level, there may be a question and answer related to ethical issues. This exchange can be done by the Board of Professional Standards established by the board compartment / institute concerned.2.3. ETHICAL PRINCIPLES OF IAIThere are eight Principles of Ethics which has determined its provisions:

1. Responsibility Profession

In principle responsibilities as professionals, each member is obliged to use moral and professional judgment in conducting its activities. As professionals, members have an important role in society. In compliance with these roles, the members have a responsibility to all users of their professional services. Members also must always be responsible for working with fellow members of the accounting profession to develop, maintain public confidence, and execute responsibilities in regulating the profession itself. Collective effort of all members is required to maintain and enhance the professional tradition.

2. Public Interest

Each member is obliged to always act within the framework of public services, honor the public trust, and demonstrate commitment to the professionalism.

a. One main characteristic of a profession is acceptance of responsibility to the public. Profession accountants play an important role in the community, where the public from accounting profession which consists of clients, creditors, government, employers, employees, investors, business and finance, and others rely on the objectivity and integrity of accountants in maintaining the function of the business orderly manner. This dependence causes the attitudes and behavior accountants in providing services affect the economic well-being of society and the state.b. Accounting profession can remain in an important position by continuing to deliver services at a level that indicates that public confidence which held firm. The main interest of the accounting profession is to make users understand that accounting services performed at the highest achievement levels and in accordance with ethical requirements necessary to achieve the level of achievement.c. In fulfilling their professional responsibilities, members may face conflicting pressures with the interested parties. In overcoming this collision, a member must act with integrity, with a belief that if the member meets its obligations to the public, then the interests of service recipients served as best as possible.d. Those who receive services from members expect the members to fulfill their responsibilities with integrity, objectivity, professional thoroughness, and to serve the public interest.e. All members bind themselves to respect the public trust. The trust given to her public, members must continually demonstrate their dedicated to achieve a high level of professionalism.f. The responsibility of an accountant is not solely to meet the needs of the individual client or employer. In performing the duties, the accountant should follow professional standards that focused on the public interest.

3. Integrity

Integrity is a unity that underlies the emergence of professional recognition. Integrity is the underlying quality of the public trust and standard for testing the members in all decision. To maintain and enhance public confidence, each member must maintain a level of integrity to continue with maximize the performance and to comply what has become his responsibility.

a. integrity is a character element that underlies the emergence of professional recognition. Integrity is the underlying quality of the public trust and a benchmark (benchmark) for members to test all of its decision.b. Integrity requires a member to, among other things, being honest and forthright without compromising confidential service recipients. Services and public trust should not be defeated by personal gain. Integrity can receive unintentional mistakes and honest differences of opinion, but can not accept the principle of cheating or negation.c. Integrity is measured in the form of what is right and fair. In the absence of rules, standards, specific guidelines or in the face of contrary opinion, members should examine the decisions or actions by asking whether the member has done what an integrity will do and whether members have been keeping her integrity. Integrity requires members to adhere to both the form and spirit of technical and ethical standards.d. Integrity also requires members to follow the principles of objectivity and professional prudence.4. Objectivity

Each member should maintain objectivity and free from conflicts of interest in fulfilling their professional obligations.1. Objectivity is a quality that gives the value of the services rendered by members of what has been giving value get. The principle of objectivity requires that members be fair, impartial, honest, intellectually, not prejudiced or biased, and free of conflicts of interest or be under the influence of others.2. Members work in many different capacities and should demonstrate their objectivity in various situations. Members in public practice providing attestation services, tax, and management consulting. Other members prepare the financial statements as a subordinate, perform internal audit services and worked in finance and management capacity in industry, education and government. They also educate and train those who want to enter into the profession. Whatever service or capacity, members must protect the integrity of the work and maintain objectivity.

3. In the face of situations and practices that are specifically related to ethics rules with respect to objectivity, sufficient consideration should be given to the following factors:a. Sometimes members faced with situations that enable them to receive the pressures given to him. This pressure can interfere with objectivity.

b. Is not practical to express and describe all situations in which pressures may occur. Size reasonableness (reasonableness) should be used in setting standards for identifying relationships that may or may impair objectivity visible member.

c. Relationships which allow prejudice, bias or influence others to violate objectivity should be avoided.

d. Members have an obligation to ensure that those who terilbat in the provision of professional services adhere to the principle of objectivity.

e. Members shall not accept or offer any gift or entertainment that is believed to cause undue influence on their professional judgment or to persons associated with them. Members should avoid situations that can make their professional position tarnished.5. Competence and Circumspection Professionals

Each member shall perform professional services with circumspection, competence and diligence, and have an obligation to maintain the knowledge and professional skills at the level that required to ensure the client or employer obtain the benefit from the services of competent professionals based on the development of practice, legislation, and techniques latest.

Competence acquired through education and experience. Members are not allowed to describe the experience of reliability competence or experiences that are not a member mastered yet or experienced members.

Professional competence can be divided into two separate phases:

i. Achievement of Professional Competence.

This achievement was initially required a high standard of general education, followed by special education, training, and professional examinations in the relevant subjects. This becomes a normal pattern of development for members.ii. Maintenance of Professional Competence.

Competence must be nurtured and maintained through commitment, maintenance of professional competence requires awarenesess to continue to follow the development of the accounting profession, and the members must implement a program designed to ensure the presence of quality control over the implementation of a consistent professional services. Meanwhile, professional prudence requires members to meet professional responsibility with competence and diligence.6. Confidentiality

In general activities of the auditor is checking some that should not be a lot of people know, but for the professional, the auditor shall maintain the confidentiality of client auditing. Each member shall respect the confidentiality of information obtained subs perform professional services and must not use or disclose such information without consent.

a. Members have an obligation to respect the confidentiality of information about a client or employer obtained through professional services rendered. The obligation of confidentiality continues even after the relationship between the members and the client or employer ends.

b. Confidentiality must be maintained by members unless special approval has been granted or there is a legal or professional obligation to disclose information.

c. Members have an obligation to ensure that staff under the supervision and the people who requested the advice and assistance to respect the principles of confidentiality.

d. Confidentiality is not merely a matter of disclosure. Confidentiality also requires members to obtain information during the conduct of professional services do not use or look terse but use information for personal gain or benefit third parties.

e. Members who have access to confidential information pliers ten service recipients should not disclose it to the public. Therefore, members should not make disclosures that are not approved (unauthorized disclosure) to others. This does not apply to the disclosure of information with the objective of fulfilling the responsibility of members according to professional standards.

f. The public interest and the profession demands that professional standards relating to confidentiality defined and that there is guidance on the nature and extent of the obligation of confidentiality as well as to a variety of circumstances in which the information obtained during the conduct of professional services can or should be disclosed.

g. The following are examples of things that must be considered in determining the extent to which confidential information may be disclosed.

i. If the disclosure is permitted. If approval is given by the recipient to reveal the services, the interests of all parties, including third parties whose interests may be affected should be considered.

ii. Disclosures required by law. Some examples where members are required by law to disclose confidential information are:

1. to produce documents or give evidence in legal proceedings; and2. to disclose a violation of law to the public.

iii. When there is a professional obligation or right to disclose:

1. to comply with the technical standards and rules of ethics; Such disclosure is not contrary to the ethical principles;

2. to protect the professional interests of members of the court;

3. to comply with the quality peneleahan (or study colleagues) IAI or profesionallainnya body; .and. to respond to the request or investigation by IAI or regulatory agencies.

7. Professional Conduct

Each member should behave consistent with good professional reputation and avoid actions that could discredit the profession. Obligation to avoid actions or behavior that could discredit or reduce the level of the profession must be met by members of sebagai embodiment of responsibility to the recipients of services, third party, other members, staff, employers and the general public.

8. Technical Standards

Each member must carry out in accordance with the technical standards of professionalism and professional standards set out in relevant. Technical standards and professional standards that must be adhered to members is the standard issued by the IAI, the International Federation of Accountants, regulatory agencies, and relevant legislation.2.4. CODE OF ETHICS FOR ACCOUNTANTS: INTERNATIONAL FEDERATION OF ACCOUNTANTS (IFAC)In June 2005, IFAC professional organizations have published a code of conduct in a complete and very detailed. Guidelines for this code, consists of three parts:

1. Part A. It contains fundamental principles of professional ethics that applies to the entire accounting profession and also provides the conceptual framework for applying those principles.

2. Part B. It contains more details concerning the application of the conceptual framework and fundamental principles in Part A to specific situations, especially for those who practice as a public accountant.

3. Part C. It contains more details about the framework of concepts and fundamental principles in section A to be applied to specific situations, especially for business accounting profession.

2.5. STRUCTURE AND FRAMEWORK OF THE IFAC CODE OF ETHICSThe mission of the International Federation of Accountants, as set out in its constitution is to develop and enhance the global accountancy profession with harmonized standards so as to provide the highest quality service consistently for the benefit of the public.

As was said brooks (2007), a code of ethics adopted by the IFAC provides the latest treatment of the provisions relating to indefedensi and interests. By because IFAC's mission is to harmonize standards among members of IFAC members in the future, it is very fitting that this IFAC code of ethics that earnest attention.

The basic framework as the IFAC code of ethics which is depicted in Figure 2.1 and Figure 2.2 can be described as follows:

1. The distinguishing feature of the accounting profession is the awareness that the accountant obligation is to serve the public interest2. It should be understood that the responsibility of accountants are not exclusively only serve clients (from the standpoint of public accountants), or simply serve boss (accountant business), but rather serve in terms of broad public accountant.3. The purpose (objective) of the accounting profession is meeting the expectations of professionalism, performance, and the public interest.4. To achieve these objectives, we need four basic needs: credibility, professionalism, high quality services, and confidentiality.5. The principles of fundamental behavior, namely: integrity, objectivity and professional compensation prudence, confidentiality, professional behavior, and technical standards.6. the principle of the five fundamental principles in item can only be applied if the accountant has an independent attitude, independent both in mind (independence in mind) and independent in appearance (independence in appearance)

Figure 2.1

Figure 2.22.6. FUNDAMENTAL PRINCIPLESFundamental Principles of Ethics consists of :

1. IntegrityA professional accountant should be straightforward and honest in all professional and business relationships.a. The principle of integrity imposes an obligation on all professional accountants to be straightforward and honest in all professional and business relationships. Integrity also implies fair dealing and truthfulness.

b. professional accountant shall not knowingly be associated with reports, returns, communications or other information where the professional accountant believes that the information:

a) Contains a materially false or misleading statement;

b) Contains statements or information furnished recklessly; or

c) Omits or obscures information required to be included where such omission or obscurity would be misleading.

When a professional accountant becomes aware that the accountant has been associated with such information, the accountant shall take steps to be disassociated from that information.2. Objectivity

A professional accountant should not allow bias, conflict of interest, or under influence of others to override professional or business judgment.a. The principle of objectivity imposes an obligation on all professional accountants not to compromise their professional or business judgment because of bias, conflict of interest or the undue influence of others.

b. A professional accountant may be exposed to situations that may impair objectivity. It is impracticable to define and prescribe all such situations. A professional accountant shall not perform a professional activity or service if a circumstance or relationship biases or unduly influences the accountants professional judgment with respect to that service.

3. Professional competence and prudence

A professional accountant has a continuing duty to maintain professional knowledge and skill at the level required to Ensure that a client or employer receives competent professional services based on current developments in practice, legislation, and techniques. A professional accountant should act Dilligently and in accordance with applicable technical and professional standards when providing professional services.4. Confidentiality

A professional accountant should respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any Reviews such information to third parties without proper and specific authority UNLESS, there is a legal or professional right or duty to disclose. Confidential information acquired as a result of professional and business relationships should not be used for the personal advantages of the professional accountant or third parties.5. Professional Behavior

A professional accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession. This includes actions that a reasonable and informed third party, weighing all the specific facts and circumstances available to the professional accountant at that time, would be likely to conclude adversely affects the good reputation of the profession.In marketing and promoting themselves and their work, professional accountants shall not bring the profession into disrepute. Professional accountants shall be honest and truthful and not:a. Make exaggerated claims for the services they are able to offer, the qualifications they possess, or experience they have gained; or

b. Make disparaging references or unsubstantiated comparisons to the work of others.2.7. RELATION OF ETHICAL PRINCIPLES IAI AND THE PRINCIPLES OF ETHICS IFAC The Indonesian Institute of Accountants or Ikatan Akuntan Indonesia (IAI) is in the process of adapting IAASB pronouncements as national standards. IAI is still doing some research on how these standards would be implemented and also trying to translate them to the national language. There is a plan to adopt IAASB pronouncements as issued in the 2009 IAASB Handbook.

Realizing this, the officers and members of IAI have discussed about readiness of IAI to adopt technical standards and international code of ethics by utilizing a variety of forums, such as congresses, seminars, workshops, training and e.t.c. The latest news, IAI officials determined as soon as possible the accounting profession in Indonesia to adopt the technical standards and conduct was issued by the International Federation of Accountants (IFAC).

CHAPTER III

VIOLATIONS OF THE CODE OF ETHICS ACCOUNTANTS 2.1. THE CASE

Gayus Halomoan Partahanan Tambunan or Gayus Tambunan was born in Jakarta, May 9, 1979;age of 33 years is a former civil servant at the Directorate General of Taxation, Ministry of Finance of Indonesia. His name became famous when Komjen Susno Duadji mentions that Gayus had money Rp 25 billion in foreign currency accounts plus Rp 60 billion and Rp 14 billion in jewelry bank vaults on behalf of his wife and that all suspected illicit treasure.

Gayus Tambunan became famous not because of his actions are commendable, but on the contrary, reproach.Category three of civil servants working in the tax directorate ever engineered tax payments for big businesses to the detriment of state money is not small.Over the way it works, the aggrieved government, employers benefited, and Gayus Tambunan itself gets its share.According to information, the benefits obtained by Gayus actually not a big yet, that has not reached the number of digits trillion rupiah.However, what he does, make the country loses, the orderly administration of an institution that should be maintained to be damaged.Moreover, public confidence in the country should be maintained as well as possible disturbed.It can not be imagine what will happen when the case, resulting in the spirit of the community to pay taxes to be decreased. The picture, of course should not happen.

Following the storyline manipulation of the tax, which is actually doing mischief not only Gayus Tambunan, but there are also others, at least entrepreneurs taxpayers associated with the case.Not less than 140 large companies that have dealt Gayus.Thus, mischief it actually involves a number of many people.So, delinquency Gayus Tambunan is due persuasion taxpayers are also just as bad.Then it might be the behavior of Gayus Tambunan uncomplimentary it is formed by the environment.For instance, he does not work in the institution, will not make the mistake that so bad.

Data flow of funds in various accounts Gayus exhibit a strong indication that the mountain of money that is related to his work as the tax authorities, which takes care of the taxpayer's objection about the amount of money they deposited into the state treasury.Listed in its, Gayus property is an accumulation of various bank transfers from many parties, both of individu and companies.Its value varies, ranging from Rp 100 million to billions of rupiah.In examining attorney, Gayus claimed to have 23 accounts at five banks: BCA, Panin, Mandiri, BRI and Bank DKI.The last registered in the name of his wife, an employee at the Jakarta City Council.

Of the development process of the case investigation, it founded the flow of funds amounting to Rp 370 million in other accounts at the Bank of Gayus H. Tambunan BCA. The money is known from two transactions of PT.MEGA Cipta Jaya Garmindo.PT.Mega Cipta Jaya Garmindo is a company owned by Korean businessman, Mr.Son and engaged in garment.Transactions carried out in two stages on September 1, 2007 amounted to Rp.170 million and August 2, 2008 amounted to Rp.200 million.After have researched and investigated, Rp.370 million is known not constitute corruption and money laundring but pure tax evasion.The money is intended to help the establishment of the tax administration garment factory in Sukabumi.However, after checking, the owner Mr. Son, Koreans, not known where he was.The money goes to Gayus H. Tambunan account but it does not take care of his tax Gayus.The money is not used by Gayus and not returned to Mr.Son so that only keep on account of Gaius.P-19 files with instructions on prosecutors to block and then confiscated money around Rp 370 million.In the instructions, the researchers also asked prosecutors investigating police (Polri) outlines in dossier (BAP) the description and a description of the suspect (Gayus H. Tambunan).Allegations of fraud are carried Gayus disclosed by Cirrus Sinaga separately and differently basic handling of the case handling money laundring, embezzlement and corruption of Rp25 billion which was originally alleged to Gayus. Cirrus and prosecutors did not mention Rp 25 billion more from Roberto Santonio transactions, a tax consultant.Attorney did not offend if they ever ordered police investigators to block and confiscate money from Roberto to Gayus account worth Rp 25 billion.Earlier, police investigators through Margiani Superintendent, in his press conference revealed that the prosecution investigators in the instructions (P-19) File Gayus ordered investigators to seize the amount of three suspicious transactions in the account of Gayus.The three transactions were known to have come from the two parties, namely Roberto Santonio and PT.Mega Jaya Citra Termindo.Transactions originating from Roberto, who is known as a tax consultant is worth Rp.25 million, while the PT.Mega Jaya Citra Termindo worth Rp.370 million.The transaction took place on March 18, June 16 and August 14, 2009. The money worth Rp.395 million were confiscated by the instructions of the prosecutor of the case investigators.

On April 7, 2010, Commission III sniff a three-star general in the police allegedly involved in the case of Gayus H. Tambunan and someone named Syahrial Johan involved in tax evasion case Gayus H. Tambunan involving, from embezzled by Gayus around Rp 24 billion, Rp.11 billion flowed to the police officials, Rp.5 billion to the prosecutorial authorities and Rp.4 billion in the judiciary, while the rest flows to the lawyers.

Markus related taxes in the company Bakrie Group, Gayus claimed to receive Rp 65 billion from the current Bakrie Group corporate tax attenuate Kaltim Prima Coal, Bumi Resources, and Arutmin.Allegedly money was also flowing to a number of officials of the Directorate General of Taxation.

2.2. CASE ANALYSISFrom the explanation above, if it is associated with the Accounting Profession Ethics is now agreed by the Indonesian Institute of Accountants and has declared recognition of the profession will be its responsibility to the public, service users accountant, and colleagues, so these principles guide the members in fulfilling their professional responsibilities and the basic foundation of ethical behavior and professional conduct, and this principle for commitment to behave honorably, even to sacrifice personal gain. Then it was predictable that Gayus had broken the principles of the Accounting Profession Ethics, including:1. First PrincipleResponsibility ProfessionIn principle responsibilities as professionals, each member is obliged to use moral and professional judgment in conducting its activities. In the case of the State's financial tax wiping, "Gayus" has forgotten the responsibility (not responsibility) as a profession."Gayus" as the taxation authorities should have a responsibility to all users of their professional services.Tax officials should always be responsible for working with fellow members of the profession to develop, maintain public confidence, and carry out professional responsibilities in organizing themselves in a professional manner in building the Nation.2. The second principleThe Public InterestEach member is obliged to always act within the framework of public services, honor the public trust, and demonstrate commitment to the professionalism. "Gayus" clearly does not respect the public trust (public trust). meanwhile the main characteristics of a profession is acceptance of responsibility to the public.The official profession plays an important role in society, in which the public are composed of clients, creditors, government, employers, employees, investors, business and finance, and others rely on the objectivity and integrity of these officers in maintaining the functioning in orderly.This dependence raises the responsibility of these officials to the public interest.The public interest is defined as the interests of society and institutions that served members as a whole.This dependence causes the attitudes and behavior of the relevant authorities in providing services affect the economic well-being of society and the State, and all of it was not done by the tax authorities "Gayus".3. Third principleIntegrity Integrity is a unity that underlies the emergence of professional recognition. Integrity is the underlying quality of the public trust and standard for testing the members in all decision. "Gayus" not at all thinking about the high integrity of fairness because the officers had lied to the public, in terms of behavior officials have used the public confidence to fulfill personal desires.Integrity requires an officer to, among other things, being honest and forthright without compromising confidential service recipients.Services and public trust should not be defeated by personal gain.Integrity can receive unintentional mistakes and honest differences of opinion, but can not accept the principle of cheating or negation.Integrity is measured in the form of what is right and fair.In the absence of rules, standards, specific guidelines or in the face of contrary opinion, members should examine the decisions or actions by asking whether the member has done what an integrity will do and whether members have been keeping her integrity.Integrity requires members to adhere to both the form and spirit of technical and ethical standards.Integrity also requires members to follow the principles of objectivity and professional prudence.

4. Fourth PrincipleObjectivity Objectivity is a quality that gives the value of the services provided by officials.The principle of objectivity requires being fair, impartial, intellectually honest, not prejudiced or biased, and free of conflicts of interest or be under the influence of others.While "Gayus" didnt show an indication like we said before because it is contrary to the principle of Objectivity which should work in many different capacities and should demonstrate their objectivity in various situations.Gayus had to sort and make the choice of WP will provide personal gain for him is to receive a "bribe" or success fees from them.Gayus is not strong the pressure and temptation of WP are handled so thats going to interfere with objectivity, and Gayus could not measure the level of fairness that can be used to define a standard for identifying relationships that might impair its objectivity, so he was not able to resist or avoid it.5. Fifth PrincipleCompetence and Prudential ProfessionalsEach member shall perform professional services with circumspection, competence and diligence, and have an obligation to maintain the knowledge and professional skills at the level that required to ensure the client or employer obtain the benefit from the services of competent professionals based on the development of practice, legislation, and techniques latest.

"Gayus" had abused competence and prudence professional for personal purpose is to reap the benefits as much just for personal pleasure.Competence and Professional prudence that should be used and applied for the benefit of nation building through taxing professional Precautionary requires officials to fulfill their professional responsibilities with competence and diligence.This implies that it should have an obligation to perform professional services with the best according to his ability, for interests of service users and consistent with the responsibilities of the profession to the public.Competence acquired through education and experience.In the case of professional assignment exceeds competence of members or the company, members shall conduct consultation or submit a client to another party who is more competent.Each member is responsible for determining the respective competence or assess whether the education, experience and adequate consideration needed to responsibilities that must be fulfilled.Officials must be diligent in fulfilling their responsibilities to the recipient and the public services.Persistence implies fulfillment of responsibility for providing services with immediate and careful, flawless and comply with technical standards and ethics.Professional prudence requires officials to plan and monitor closely any professional activity that becomes the responsibility.

6. Sixth PrincipleConfidentiality In general activities of the auditor is checking some that should not be a lot of people know, but for the professional, the auditor shall maintain the confidentiality of client auditing. Looking at the case against tax irregularities committed tax officials "Gayus", it should be really done secrecy for and in the interest of the State and nation building and not to protect the interests of certain groups.

"Gayus" does not maintain the confidentiality of information and does not respect the confidentiality of such information.Officials have an obligation to ensure that staff under the supervision and the people who requested the advice and assistance to respect the principles of confidentiality.Confidentiality is not merely a matter of disclosure.Confidentiality also requires officials to obtain information during the conduct of professional services do not use or look terse but use information for personal gain or benefit third parties.Officials who have access to confidential information about the service recipient must not disclose it to the public.Therefore, members should not make disclosures that are not approved (unauthorized disclosure) to others.This does not apply to the disclosure of information with the objective of fulfilling the responsibility of members according to professional standards.Public interest and profession demands that professional standards relating to confidentiality defined and there is a guide to the nature and extent of the obligation of confidentiality as well as the various circumstances in which the information obtained during the conduct of professional services can or should be disclosed.7. Seventh PrincipleProfessional ConductEach member should behave consistent with good professional reputation and avoid actions that could discredit the profession. "Gayus" showed absolutely no professional behavior in the eyes of the public, where the behavior of the profession clearly apparent harm to the community of the nation and the State.Obligation to avoid behavior that could discredit the profession must be met by members as the embodiment of the responsibility to the recipient of services, third party, other members, staff, employers and the general public.8. Eighth PrincipleTechnical StandardsEach member must carry out in accordance with the technical standards of professionalism and professional standards set out in relevant. In the case of tax evasion by the tax authorities "Gayus" did not found technical standards and professional standards in carrying out its duties and responsibilities which should be in accordance with applicable regulations and of course lead to the acceptance of national income to development Nations in accordance with the applicable standards and regulations.The expertise of Professional standards and with careful, members have an obligation to carry out the assignment of service recipients during the assignment in line with the principles of integrity and objectivity.Technical standards and professional standards that must be adhered to is the standard issued by the Indonesian Institute of Accountants, the International Federation of Accountants, regulatory bodies, and legislation relevant.CHAPTER IV

CONCLUSIONProfessional accountants must develop assessment, values and character that can embrace the public expectations, which can not be separated in accountability-oriented stakeholders and governance framework. Code of Conduct updated in order to be better guidelines for professional accountants and ensure that personal interests are unbearable, bias, and / or misunderstandings do not obscure independent way of thinking professional accountant or raises a continuing lack of independence of the professional accountant.In the case of embezzlement Gayus ethical principles are being violated by the IAI, namely Responsibility Profession, Public Interest, integrity, objectivity, competence and Prudential Professionals, Confidentiality, Professional Conduct, and technical standards.It is a negative impact on the institution taxation, for being negligent in supervising the actions of individual tax officials,coupled with abetting tax image in the public eye with this case.

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