In this paper, I will explain if I believe whether a code of ethics should do more than the establish minimum acceptable standards. I will also describe the 5 cardinal virtues of professional accountings, whether there should be rules-based ethics standards. Lastly, I will compare and contrast the AICPA’s Code of Professional Conduct and the IFAC Code of Ethics for professional accountants.
Reporting Practices and Ethics Kara Moore HCS/405 August 1, 2011 Barbara Archer Reporting Practices and Ethics Financial reporting practices and ethics have manifested an ocean of literature. This has mainly come from organization theorists that address accounting practices. These theorists and professionals have given fresh accountability measures. Their ideals give this industry the tools needed to survive, grow and prosper. The way an organization prepares and reports its financial information and handles its daily operations is in essence financial practices, and in the way it accomplishes this reveals their ethical standards to which they adhere to. This paper will discuss the financial practices, ethical standards, and
Assignment Week 1 The Case of Phar-Mor Inc Devry University ACCT 525-15768 January 12, 2014 Abstract The Sarbanes-Oxley Act of 2002 was implemented with the sole purpose of assuring the investors in the financial reporting system. One example is a case such as Phar-Mor which fabricated their inventory in most of their retail stores in order
Limited access to records and assets can really make it hard for someone in an organization to commit fraud. If the accounting department never has access to the actual money and the people in charge of the money have no access to the accounting of the organization other than sending them the info over that the
Ethics can be defined as a set of values used to judge whether an action is morally right or wrong based on the duty and obligation of an individual (Hess, 2007). Hence, in view of a given task that has to be performed, we are able to judge the performance as being good or wrong based on some moral principles. Hutchings (2010) notes that ethics can be held by an individuals or a groups of people. This paper will be predicated on the thesis that both the utilitarianism and deontological viewpoints have potential to impact the accounting profession and have to be adopted with care.
As technological advances force globalization and unified standards upon the world of accounting, the understanding of ethical systems and their role on business becomes a necessity. The goal of accounting is to provide users with reliable and accurate information that is independent and complete. However, if accountants around the world are not subscribing to the same ethical standards and theories, then the urgency to unify standards and practices between U.S. GAAP and the IFRS are no longer significant. With ethical theories being extensive in nature they can result in different outcomes and justifications making them the highest priority in accounting. Required education and training on each system is necessary to understand flaws and contradictions
Running head: IMPORTANCE OF ETHICS IN ACCOUNTING Importance of Ethics in Accounting Everest University Importance of Ethics in Accounting Accounting fraud is common but is not as trivial as the common cold; a typical organization loses annual revenues of nearly 5 percent to fraud. In addition, almost one-quarter of reported
What Were the Specifics of the Fraud? The WMI accounting fraud case described a financial fraud committed by senior management of WMI, with the help of Arthur Andersen the external auditors. The case depicts the effort of several years to inflate profits at WMI, employing aggressive accounting practices which enabled the WMI to conceal $1.7 billion in form of expenses (Riley and Rezaee, 12). By eliminating or deferring expenses, WMI managed to meet earnings targets and improve
The Law, Ethics and a New Accountant’s Perspective on Enron Ethics is a decision one makes in knowing the right thing to do and actually doing the right thing. They are the rules of behavior based on one’s belief of what is morally good and bad. A person may hear
According to the principles of accounting course, master budgets are a set of budgeted financial statements and supporting schedules for an entire organization that includes three types of budgets: the operating budget, the capital expenditure budget, and the financial budget. Managers of an organization use this financial plan to coordinate
Industry companies were competing against WorldCom under false pretenses. WorldCom was fraudulently stating its financials and its competition could not possibly be aware of WorldCom’s true expenses. As a result, competing companies were forced to make decisions to keep in line with WorldCom’s reported growth. AT&T fired tens of thousands of
This $490 million came from the netting manipulation when they offset their expenses with unrelated gains on the sale of assets. The geography manipulation allowed them to move millions of dollars to different sections of the income statement to “make the financials look the way we want to show them” said James Koenig, one of the primary forces behind the scandal. However, none of the fraudulent activities would have gone unknown for so long without the aid of the auditors, Arthur Anderson LLP, involved with Waste Management.
Ethics is an essential in the running of any business, but it is more than ever critical when transacting accounting decisions. When dealing with ethics in the business world, management must remember what is ethically right
In the field of accounting, it is really hard to say that any particular ethical system is used more often than others. According to Katherine Y. Masten, “ The most common ethical systems used in accounting are deontology and utilitarianism”. She also mentions “A specific ethical dilemma that arises within accounting tends to be the utilitarian conflict. Since the greater good is accomplished in this system, personal responsibility and ethics lose importance” (Ethics in Accounting 2012). However, it is not very common nowadays to see people who do auditing that believe only those two systems. Additionally, every company or firm that deal with accounting and auditing required have own Code of Conduct after Sarbanes- Oxley act. And, most common principles that used in Code of Conduct for accountants are integrity, objectivity, and professional behavior (Appendix).
Management Accountants’ Code of Ethics A code of ethics is necessary for the success of any type of business whether it be a professional service organization such as a law firm or an accounting firm, a manufacturing company such as Chrysler, Toyota, Apple or Microsoft, or a retail company such as Walmart or Target. Within each type of organization lie various types of services that are governed or controlled by a specific set of standards and code of ethics. Each set of standards and code of ethics is designed by a specific governing body. Management accounting is one such branch of service that is regulated by the Institute of Management Accountants (IMA) of the United States. As the regulating authority, the IMA has “adopted an ethical code called the Statement of Ethical Professional Practice that describes in some detail the ethical responsibilities of management accountants” (Garrison, Noreen, and Brewer, 2015, p.9). “The IMA Committee on Ethics encourages organizations and individuals to adopt, promote, and execute business practices consistent with high ethical standards, by providing valuable insight in response to our changing profession. The Committee upholds IMA’s Statement of Ethical Professional Practice and provides subject-matter expertise to members of IMA for resolution of ethical conflicts” (IMA Committee on Ethics).