Importance Of Code Of Ethics In Accounting

2167 Words5 Pages
bulb-icon

Recommended: Ethical challenges in accounting field

The profession of accountancy has become the important pillar in the organizations and helping the business community of the world to sustain value and growth. Accountants are working in wide variety of roles and across all sectors of the economy; therefore the success of this profession is very important for the efficient working of the capital markets and economy. However, this profession is in continued pressure for performing their services competently as well as ethically. Therefore the accounting bodies and regulators of the world have increased their supervision of this profession. Due to this changing environment, accounting bodies in Australia have also taken steps to ensure the professional accountants should perform their services ethically. In this report we are discussing how what are the fundamental code of ethics for professional accountants working in Australia and what are the threats and safeguard majors for these codes of ethics. In the last part of this report we have discussed a case study in which employees of the global company have been involved in a ethical wrongdoing and what are its consequences.

2. FUNDAMENTAL PRINCIPLES OF CODE OF ETHICS

The integrity of the profession is dependent upon the ethical conduct by the members of the profession. Without proper guidelines of the ethics, professionals may try to create their own standards which may not be in the best interest of the profession. Therefore the accounting bodies in Australia established an independent body, Accounting Professional and Ethical Standard Board (APESB) in 2006. This independent board was responsible for the development of the code of the ethics for professional accountants in Australia and to further enhance these ...

... middle of paper ...

....

 Business and professionals should always respect other people culture and values and do not engage themselves in anything which is ethically incorrect.

 Those who break the standards should be given strict penalties and cancellation of their license.

 Organizations should be developed which would help in global ethical problems and try to create global ethical standards for accountants and other professionals.

7. CONCLUSION

Recently, after the collapse of big corporations, integrity of the accounting profession has comes under greater scrutiny. Therefore in order to enhance the credibility of the profession, accoutnig bodies of the world is putting highest importance on the ethical conduct of its members. Without maintenance of the highest ethical standards, the recognition and creditability of the accounting profession is not possible.

Show More
Related

  • AICPA Code Of Professional Conduct Analysis

    1351 Words  | 3 Pages

    This organization has been setting ethical standards and publishing the Code of Professional Conduct for the profession since the early 1900s. A Code of Professional Conduct is necessary for any profession to help maintain strict ethical standards. This organization is the basis of ethical reasoning in the accounting profession because of what the Code of Professional Conduct covers. The code is comprised of a preamble and six articles. The preamble and the six articles serve as a foundation to provide guidance and guidelines for accountants to overcome any emerging ethical issues with ease on a daily basis. The six articles’ purpose is to protect the public, investors, and creditors. The AICPA Code of Professional Conduct consists of: Responsibility, Public Interest, Integrity, Objectivity and Independence, Due Care, and Scope and Nature of

    Read More

  • A Corporate Code of Ethics is Not Enough

    2353 Words  | 5 Pages

    For a company to be successful ethically, it must go beyond the notion of simple legal compliance and adopt a values-based organizational culture. A corporate code of ethics can be a very valuable and integral part of a company’s culture but I believe that it is not strong enough to stand alone. Thought and care must go into constructing the code of ethics and the implementation of it. Companies need to infuse ethics and integrity throughout their corporate culture as well as into their definition of success. To be successfully ethical, companies must go beyond the notion of simple legal compliance and adopt a values-based organizational culture.

    Read More

  • Accounting Fraud, the Investor and the Sarbanes Oxley Act

    1981 Words  | 4 Pages

    Throughout the past several years major corporate scandals have rocked the economy and hurt investor confidence. The largest bankruptcies in history have resulted from greedy executives that “cook the books” to gain the numbers they want. These scandals typically involve complex methods for misusing or misdirecting funds, overstating revenues, understating expenses, overstating the value of assets or underreporting of liabilities, sometimes with the cooperation of officials in other corporations (Medura 1-3). In response to the increasing number of scandals the US government amended the Sarbanes Oxley act of 2002 to mitigate these problems. Sarbanes Oxley has extensive regulations that hold the CEO and top executives responsible for the numbers they report but problems still occur. To ensure proper accounting standards have been used Sarbanes Oxley also requires that public companies be audited by accounting firms (Livingstone). The problem is that the accounting firms are also public companies that also have to look after their bottom line while still remaining objective with the corporations they audit. When an accounting firm is hired the company that hired them has the power in the relationship. When the company has the power they can bully the firm into doing what they tell them to do. The accounting firm then loses its objectivity and independence making their job ineffective and not accomplishing their goal of honest accounting (Gerard). Their have been 379 convictions of fraud to date, and 3 to 6 new cases opening per month. The problem has clearly not been solved (Ulinski).

    Read More

  • Accounting profit and True Profit

    996 Words  | 2 Pages

    ...urvey of ethical behavior in the accounting profession. Journal of Accounting Research, 9 (2), pp. 287-306.

    Read More

  • Moral Code Of Ethics In Business Ethics

    721 Words  | 2 Pages

    When running a business ethics plays an important role in the success of the business. “Ethics is the study of those values that relate to our moral conduct, including questions of good and evil, right and wrong, and moral responsibility” (pg. 2). Every individual will have a different set of moral codes. Moral codes are shaped by your personality, environment and religion. In this scenario and throughout this paper you will come to understand how our moral code of ethics plays a role in our daily decisions.

    Read More

  • Personal Code of Ethical Values

    1271 Words  | 3 Pages

    I strive to embody integrity in everything that I strive to do. This means that each and every one of my actions must encompass and demonstrate the values I possess, no matter what the context of the situation. Additionally adhere to high moral principles and professional standards put forth by the American Institute of Certified Public Accountants. Secondly, I believe that it is important to be honest and respectful. I desire to express truth in every written and spoken word. Presenting information in a fair and impartial way when it comes to performing accounting duties is necessary in a profession that serves the public interest. I believe that being respectful means showing consideration and thoughtfulness in my relationships with my fellow those that I come into contact with. This goes hand in hand in treating everyone from fami...

    Read More

  • Business Ethics Issues in the Movie Boiler Room

    1086 Words  | 3 Pages

    Ethical issues in business arise because of conflicts between an individuals personal moral philosophies and values and values or attitudes of organization in which a person works and a society in which one lives. Ethical issues can be identified in terms of the major participants and functions of business. Ethical issues related to ownership include conflicts between manager’s duties to the owners and their own interests, also separation of ownership and control of business. Financial issue includes, for example, the accuracy of reported financial documents. Ethical issues can acquire between manages and employees, then employees are asked to carry out assignments they consider unethical. Consumers and marketing issues are related to providing safe desired products for a fear price and not harming people and an environment. Accountants also face ethical dilemma, they have to deal with competition advertising commission. All of this places the accounting profession in situation of ethical risk.

    Read More

  • Authentic Leadership: Thesis Of Authentic Trust In Leadership

    1259 Words  | 3 Pages

    The other reason for erosion can be that the accounting and auditing profession in particular needs to regain trust. People of America from last two decades have witnessed high profile scandals and in which the accountants and auditors have failed in their fiduciary responsibilities. The removal of self regulation in the auditing profession can serve as a wakeup call to all the leaders and professionals of all types.

    Read More

  • Why Are Ethics Important In The Accounting Profession

    1384 Words  | 3 Pages

    Romal, Jane B., and Hibschweiler, Arlene M. "Improving Professionals Ethics: Steps for Implementing Change." The CPA Journal (2004). Retrieved on 16 September 2006 .

    Read More

  • Accounting Scandals: The ENRON Scandal in 2001

    1233 Words  | 3 Pages

    Accounting ethics has been difficult to control as accountants and auditors must keep in mind the interest of the public while that they remain employed by the company they are auditing. The accountants should take into account how to best apply accounting standards when company faces issues related financial loss. The role of accountant is crucial to society. They serve as financial reporters to owe their primary constraint to public interest. The information provided is critical in aiding managers, investors and others in making crucial economic decisions. An accountant is responsible for any fraudulent financial reporting. Some examples of fraudulent reporting are:

    Read More

  • Importance Of Ethics In Accounting

    1556 Words  | 4 Pages

    This essay will talk about the ethical standards and code of conduct in the accounting profession, in particular for CPA Australia, the importance of ethical education for accounting students, the importance for ethical financial reporting and also addresses ways to deal with conflicts that arise from ethical issues in the

    Read More

  • Accounting Reflection

    707 Words  | 2 Pages

    From the first tutorial, ‘Current Conceptions of Accounting’, we had already change our prediction on accounting professional. At the beginning, we through that accounting professional would be more formal and format. From what we have learnt from the first two semesters of accounting, we need to do everything under the current structure, standards, and regulations. Accounting is a tool and skill that help us to achieve our career successful. However, the first tutorial activity, which require us to bring up our view of ‘accounting, accountability, or an accountant’ from a lifestyle magazine. This activity make us found that accounting could be just next to us, not just in the career field, but also could find it anywhere in our life. This activity has open up our mind of accounting

    Read More

  • The History of Auditing

    3399 Words  | 7 Pages

    The evolution of auditing is a complicated history that has always been changing through historical events. Auditing always changed to meet the needs of the business environment of that day. Auditing has been around since the beginning of human civilization, focusing mainly, at first, on finding efraud. As the United States grew, the business world grew, and auditing began to play more important roles. In the late 1800’s and early 1900’s, people began to invest money into large corporations. The Stock Market crash of 1929 and various scandals made auditors realize that their roles in society were very important. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. The auditors’ job became more difficult as the accounting principles changed, and became easier with the use of internal controls. These controls introduced the need for testing; not an in-depth detailed audit. Auditing jobs would have to change to meet the changing business world. The invention of computers impacted the auditors’ world by making their job at times easier and at times making their job more difficult. Finally, the auditors’ job of certifying and testing companies’ financial statements is the backbone of the business world.

    Read More

  • The Importance Of Ethics In Business

    1265 Words  | 3 Pages

    Ethics is the study of right or wrong and the morality of the choices that individuals make. That basicly means the set of morals or responsibility that a person, group, or field have. Ethics can also be classified as code of morals. In business there are ethics that portray to business. These are called business ethics, business ethics just happen to be the application of ethics, morals, into the business field. Some examples of business ethics are obeying all rules and regulations even when nobody 's looking, which is pretty self explanatory, you shouldn’t be breaking rules. Even if it is as simple as washing your hands after you use the restroom or straight up lying to your customers, they are the ones making you money so if they find out

    Read More

  • Essay On Accounting Information System

    1216 Words  | 3 Pages

    The function of accounting information system transforms from simple storage to a supportive tool of decision-making, producing high quality information and detailed analysis, bringing about real economic benefits. However, it also challenges the skills and ethics of modern accountants, putting forward the new demand for the professionals who use the accounting information system. As a result, two capabilities are recognized to be essential for the professionals. One is the competency, it lists out a pattern of knowledge used in the job as well as be aware of the link between information systems and decision-making. On the other hand is the ability of analyzing and diagnosing, which is good at problem solving. Another challenge is about ethical issue, requiring integrity and confidentiality as a professional quality of an accountant. To conclude, the accounting information system integrating the information, analyzing and supporting decision-making will become more important in the forming of a company’s strategy. Understanding the structure of accounting information system would lead to a competitive advantage over competitors in the

    Read More

More about Importance Of Code Of Ethics In Accounting

Open Document