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public perception 
of 
competence and integrity
. 
Integrity is also one of the fundamental principles discussed in the IFAC code of ethics. It provides 
assurance to those with whom the accountant deals of good intentions and truthfulness.
 
2
Management accountability 
Organisations are not autonomous; they exist to serve some external purpose, usually manifested in a 
group such as shareholders in a company or trustees of a charity. In particular, the 
strategic apex must
not lose sight of this accountability
. All managers have a 
duty of faithful service
to the external purpose 
of the organisation and this lies most heavily on the shoulders of those at the strategic apex. 
2.1 Fiduciary responsibility 
Organisations are not autonomous; that is to say, they do not exist to serve their own purposes or those 
of their senior managers. They exist to serve some external purpose and their managers have a duty to 
run them in a way that serves that purpose, whether it be to relieve distress (a charity), to keep the 
peace and manage the economy (a government), to promote the interests of its members (a trade union) 
or to make a profit (a business). Managers have a 
fiduciary responsibility
(or duty of faithful service) in 
this respect and their behaviour must always reflect it. 
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CHAPTER 19
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ETHICAL CONSIDERATIONS 
 
481 
2.2 Example 
Managers need not be actually corrupt in order to fail in their fiduciary duty. The CEO who sets in 
motion a takeover bid that will enhance their prestige; the head of department who 'empire builds'; and 
the IT manager who buys an unnecessarily sophisticated enterprise resource management system are all 
failing in their fiduciary duty even though they receive no material benefit themselves. 
2.3 Business objectives and management discretion 
There are differing views about the extent to which external pressures modify business objectives and 
form boundaries to the exercise of management discretion. 
(a)