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Ethical practices in accounting
Ethical issues faced by accountants
Justification of the ethical issues faced by accountants
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Every profession faces a multiple of ethical challenges on a daily bases, this can be clearly witnessed in the accounting profession. The main focus of this literature review is to discuss the ethical values held in this profession and to also explore the ethical challenges that they face. Professional ethics for accountants is all about making sure that accountants carry out their duties to the highest standard possible and in a very professional manner. A code of ethics is designed to make sure that ideal behaviour is being carried out and it must be enforceable and realistic. From reading a variety of literature the core principles of the code of ethics are as follows: integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. Although there are a large amount of ethical challenges that could arise when the professionals are complying with the code of ethics, this review will focus on some of the major ones. The IFAC has set out the five fundamental principles in order to achieve a common understanding. Firstly there is integrity, this principle is there to make sure that all accountants are being truthful and honest at all times. Next there is objectivity, this is where the accountant must remain impartial at all times while carry out their duties this will therefore result in a fair and correct result in relation to their accounts. Next there is the principle that is the professional competence and due care, this is where the accountant must carry out their work to the highest possible standard and in a very profession manner in order to avoid possible mistakes and therefore lead to future issues. Next we have confidentiality in place to make sure that accountants are aware t... ... middle of paper ... ...: The view from the top. Journal of Business Ethics [Online], 7(8), pp. 605-615 Available from: http://link.springer.com/article/10.1007/BF00382793 [Accessed 27 April 2014] Taylor, E. and Curtis, M. 2010. An Examination of the Layers of Workplace Influences in Ethical Judgements: Whistleblowing Likelihood and Perseverance in Public Accounting. Journal of Business Ethics [Online], 93(1), pp. 21-37 Available from: http://link.springer.com/article/10.1007/s10551-009-0179-9 [Accessed 29 April 2014] Websites IFAC 2006. Code Of Ethics For Professional Accountants [Online]. Available from: https://www.ifac.org/sites/default/files/publications/files/ifac-code-of-ethics-for.pdf [Accessed 22 April 2014] Business Dictionary 2014. Conflict of Interest [Online]. Available from: http://www.businessdictionary.com/definition/conflict-of-interest.html [Accessed 27 April 2014].
Accountants following the professional code in the society are critical. The Code of Professional Conduct has been closely related and referred to as accounting ethics. Accounting ethics are difficult to comprehend because accountants and auditors must take into consideration the public’s interest and ensure they are performing up to standards. Listed below are some focuses in the Code of Professional Conduct that accountants follow.
It's difficult not to be cynical about how “big business” treats the subject of ethics in today's world. In many corporations, where the only important value is the bottom line, most executives merely give lip service to living and operating their corporations ethically.
2.Goodpastor, Kenneth. Nash, Laura. de Bettignies, Henri-Claude. Business Ethics: policies and persons 4th edition. Mcgraw Hill Irwin Publishers. Pages 396-405
Proverbs 10:9 states: “People with integrity walk safely, but those who follow crooked paths will slip and fall” (New Living Translation).” This Scripture suggests that individuals who do not walk in integrity follow “crooked paths.” They walk in ways that are not morally sound, pure, and honest—but in ways that are corrupt. Clients want accountants with integrity. Thus, integrity is critical to the public trust. As a matter of fact, one of the general definitions of integrity provided by the AICPA Code is that it is a quality from which the public trust derives. Also, it is an element of character fundamental to professional recognition, and it requires members to be (among other things) honest and candid within the constraints of confidentiality (Duska, Duska & Ragatz, 2011). Integrity in the accounting profession involves adhering to the rules and principles of the profession. This includes remaining free of conflicts of interest and maintaining client relationships in which the accountant can remain objective in discharging his or her responsibilities. This requires independence in fact and in appearance as mandated under section 1.200.001.01, Independence Rule the AICPA Code. In other words, no one should be able to view the accountant as being biased with respect to a client’s financial reporting due to an improper client relationship. Lack of integrity in accounting practices has been, and continues to be, a key element in the downfall of many institutions which has hurt the public trust in the accounting
Trevino, L. K., & Nelson, K. A. (2011). Managing business ethics: Straight talk about how to do it right. New York: John Wiley.
The work emphasizes that having business ethics and a code of conduct can be a preventive medicine. The intended audience is the general public, management team, large businesses that have yet to create and develop a code of conduct, and businesses who are searching for a solution towards resolving ethical dilemmas in their workplace. The relevance of this work to our topic is it’s unique outlook on how the code should not only be developed with HR and the legal departments with the only intention of keeping policies legal but to see it being navigated by top management. It will also help us establish the usefulness of the code of conduct in relationships with stakeholders. A special feature of this work is the large-scale of sections it has on the topic of code of ethics. It contains a content section at the very top of the article that helps navigating toward sections easier. It also includes quotes from CEO’s, ethics professor Stephen Brenner form the Journal of Business Ethics, Twin Cities-based consultant Doug Wallace, etc. The writer of this article is Carter McNamara who has a MBA and PhD who specializes in organizational development and
Trevino, L., & Nelson, K. (2011). Managing business ethics - straight talk about how to
...urvey of ethical behavior in the accounting profession. Journal of Accounting Research, 9 (2), pp. 287-306.
Brooks, L., Dunn, P. (2012) Business & Professional Ethics for Directors, Executives & Accountants. 6th Edition. Thompson South-West.
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...
When working within any professional body, an individual will be subjected to circumstances in which personal ethics will come into play. The Accounting profession is no different as ethical questions arise as part of any working day and can effect how an individual or the company conducts business. These questions can vary greatly in practice from selection of new customers to the rates at which those clients are going to be charged. These ethical questions are raised regularly within the workplace and each employee will react to them differently. The varying reactions will depend on the morality of each individual, or each employees own ‘ethics’. As each employee has their own set of values companies must be alert to the fact that some of their employees may have more ‘flexible’ morals than others. This ‘flexible’ morality can lead to corruption and manipulation within the workplace and can give companies serious problems. As a result of this, all of the main professional accounting bodies have begun to re-introduce mandatory courses teaching ethics to their employees. As well as this, ‘A Guide to professional ethics’ was published which contains a number of different principles in order to govern the behaviour of accountants and also to identify and reduce the greatest areas of risk with respect to unethical behaviour.
Seawell, Buie 2010, ‘The Content and Practice of Business Ethics’, Good Business, pp. 2-18, viewed 22 October 2013, .
Norman, W., & MacDonald, C. (2004). Getting to the bottom of the "triple bottom line". Business Ethics Quarterly, 14(2), 243-262. http://dx.doi.org/10.5840/beq200414211
Treviño, L. K., & Nelson, K. A. (2007). Managing business ethics: Straight talk about how to do it right Fourth ed., Retrieved on July 30, 2010 from www.ecampus.phoenix.edu
It is highly essential for accountants and business professionals to maintain a standard of ethical conduct in the workplace as the nature of their work places them in position of trust. (Senarante, 2011). Accountants have the responsibility to ensure that their duties are performed in accordance with the five fundamental principles set out in the Code of Professional Ethics such as integrity, objectivity, professional competence and due care, confidentially and professional behaviour (Cunningham et al. 2014). Accountants are expected to be reliable and trustworthy. Thus they are required to act ethically in relation to their clients, employers and the general public in order to provide quality services in the best interest of the society (Eginiwin & Dike, 2014). The International Federation of Accountants (IFAC) have established a code of ethics for accountants, allowing each specific country to add their own national ethical standards to the code to reflect cultural differences. The code provides emphasis on the five fundamental principles as well as resolution of ethical conflicts. In Australia, professional accounting bodies such as CPA Australia, Institute of Chartered Accountants in Australia (ICCA) and the Institute of Public Accountants (IPA) adopt the Australian Professional and Ethical