Fundamental principles of ethics for professional accountants
According to the Code of Ethics for Professional Accountants (COE) issued by the HKICPA, there are five fundamental principles of ethics for professional accountants (the fundamental principles):
- Integrity – to be straightforward and honest in all professional and business relationships.
- Objectivity – to exercise professional or business judgment without being compromised by:
- Bias;
- Conflict of interest; or
- Undue influence of, or undue reliance on, individuals, organizations, technology or other factors.
- Professional Competence and Due Care – to:
- Attain and maintain professional knowledge and skill at the level required to ensure that a client or employing organization receives competent professional service, based on current technical and professional standards and relevant legislation; and
- Act diligently and in accordance with applicable technical and professional standards.
- Confidentiality – to respect the confidentiality of information acquired as a result of professional and business relationships.
- Professional Behaviour – to:
- Comply with relevant laws and regulations;
- Behave in a manner consistent with the profession's responsibility to act in the public interest in all professional activities and business relationships; and
- Avoid any conduct that the professional accountant knows or should know might discredit the profession.
Inducements, including gifts and hospitality
Under section 340 of Chapter A of the COE, an inducement is an object, situation, or action that is used as a means to influence another individual's behaviour, but not necessarily with the intent to improperly influence that individual's behaviour. Inducements can range from minor acts of hospitality between professional accountants and existing or prospective clients to acts that result in non-compliance with laws and regulations. An inducement can take many different forms, for example, gifts, hospitality, entertainment, employment or other commercial opportunities, etc.
A professional accountant shall not accept or encourage others to accept any inducement that is made with the intent to improperly influence the behaviour of the recipient or of another individual. An inducement is considered as "improper" if it causes the individual to act in an unethical manner. The fundamental principles are an appropriate frame of reference for a professional accountant in considering what constitutes unethical behaviour. However, if such an inducement is trivial and inconsequential, any threats created will be at an acceptable level.
Is it fine for me to accept
meals, entertainment, gifts, employment contract, etc. from my clients? 
When handling the above situations, external auditors should remain vigilant to the legal requirements under the Prevention of Bribery Ordinance (POBO) (Cap. 201) and other relevant legislations, as well as the various threats to the fundamental principles of ethics for professional accountants. 
