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When auditing a publicly held company, auditors need to observe principles. The ethical principles of the American Institute of Certified Public Accountants (AICPA) Code of

“ In order to prevent fraudulent financial reports and statements, the American Institute of Certified Public Accountants(AICPA) has created ethical standards” (Ethical standards in a financial statement, 2011). These standards aim to make financial professionals accountable for their accounting practices. This includes the integrity of financial reporting and ensuring financial reporting is done fairly and factually. Financial accountants and professionals should maintain professional integrity, objectivity, and independence to reduce the risk of resulting legal action, loss of profits, and a poor reputation if improper financial reporting is done (Ethical standards in a financial statement, 2011).

A CPA’s retention of client-provided records as a means of enforcing payment of an overdue audit fee is an action that is

Accountants are held to a higher ethical standards and they must performed their duties in compliance with standards or ethical values of honesty, integrity, objectivity, due care, confidentiality, which must be fully committed to. They must put clients or public interest first before their own. They must have and ethical values and maintain those values way beyond what the society or the company’s code of ethic. It is important that accountants’ behavior or ethical values is in conformity with the

Section four of the AICPA Rules of Professional Conduct is Section 400 – Responsibilities to Colleagues. This section is currently not being used. This section is being saved for future rules on the responsibilities to one’s colleagues. The purpose of this section is for accountants to know what should take place when someone does something illegal and must be addressed. It is also important to make sure that their own actions are accounted for when it comes to working with others in the financial field.

The Model of Trust Enhancement was established to enhance and maintain the public’s trust in the accounting profession. Over the last two decades, the ethics of the accounting profession has been questioned and public trust destabilized, in particular for auditors, due to the Enron debacle. The fact that an auditing firm would assist their clients with publishing an inadequate set of financial statements shows their willingness to violate laws and regulations (Sims & Brinkmann, 2003). According to the textbook, “Because trust is essential, even the appearance of an accountant’s honesty and integrity is important. The auditor, therefore, must not only be trustworthy, but he or she must also appear trustworthy” (Duska, Duska & Ragatz, 2011, p. 116). The majority of statements filed inadequately have a substantial impact on the credibility of the accounting profession as a whole. Sullivan (n.d.10) states that a CPA must possess a high level of trust, by applying professional judgment and enhancing the three trustworthy characteristics (ability, benevolence, and integrity) when resolving accounting ethics dilemmas (slide 3).

Ethics in any industry is important, but for Accounting professionals and those in need of their services, it is a particularly stressed element. Information provided by accountants is used to make major decisions, including investing, downsizing, expanding, etc, so accountants are expected to be competent, reliable, and have a high degree of professional integrity. Because of these high expectations, the professional accountancy industry, like many other professions, has adopted professional codes of ethics (Woelfel, 1986). These ethical codes go above and beyond the requirements for state or federal laws and regulations. There are several professional organizations within the

Businesses, investors, creditors rely on accounting ethics. The accounting profession requires honesty, consistency with industry standards, and compliance with laws and regulations. The ethics increase the responsibility and integrity of accounting professionals, and public trust. The ethical requirements influence the management behavior and decision-making. The financial scandal of Enron and Arthur Anderson demonstrates the failure of fundamental ethical framework, such as off-balance sheet transactions, misrepresentation of financial statements, inaccurate disclosure, manipulations with earnings, etc. The confronted accounting profession and concern for ethics in businesses forced regulators to revise the conceptual framework of accounting processes.

Imagine trusting your hard-earned money like your retirement savings to a financial adviser or Certified Public Accountants (CPA) only to lose it all in a fraudulent Ponzi scheme. In today’s world of business many organizations, financial planners and accountants are in the news due to the financial ethical breaches that have affected their customers, employees, and the general public. A CPA has to be responsible for their audits and take any punishments as a result of their mistakes, incompetence or illegal actions. CPAs are expected to have integrity in their work,

The American Institute of CPA’s code establishes standards for auditor independence, integrity and objectivity, responsibilities to clients and colleagues and acts discreditable to the accounting profession. American Institute of CPA’s Code of Profession Conduct is broken down into principles and rules; responsibilities, public interest, integrity, objectivity and independence, due care, and scope and nature of services. The code of profession conducts telling the member to carry out their responsibilities as professionals. Having a bit of background in psychology I know that according

Ethical issues have greatly transformed in our lives since the great Enron, Xerox and other huge corporations proposed big profits showing earnings of billions of dollars and yet in reality facing bankruptcy. These corporations faced great trouble with the federals and state for manipulating financial statements. But not only corporations can be blamed on this, accounting firms were involved in this as much as the corporations were. With the business stand point, ethics comprises of principles and standards that guide behavior. Investors, traders, customers, and legal system determine whether a specific action is ethical or unethical. Ethical issue is a vast subject, but we will look at the niche

When determining and defending the use of a particular ethical system within the confines of a profession, it is important to evaluate the system in terms of the professional culture as well as the expected professional conduct laid out within the vocation itself. The accounting profession has been evolving for thousands of years. Early accounting records date business transactions back as far as third century B.C. (Schroeder, Clark, & Cathey, 2009). Early record keeping was for internal purposes and as societies and economies expanded, it became important to maintain records for external purposes as well. According to Schroeder, Clark & Cathey (2009), by the ninetheeth centruy, bookkeeing expanded into accounting (p. 3). From this time, it has been the duty of the accountant to serve the public interest and the profession has been culitvated into an organizational culture with professional norms and standards constantly taking shape in an effort to complete an all-inclusive conceptual framework.

With professions having this tremendous knowledge regarding a company’s financial standing and not being able to disclose the information to the public it can create major investment errors. With these restrictions in place by the AICPA the accountants and auditors “… in a position of having to choose between earning a livelihood or making a proper ethical choice” (Synder, 2011).

Ethics is a term that refers to a code or moral system that provides criteria for evaluating right and wrong. Accounting ethics is a primarily a field of applied ethics, the study of moral values and judgments as they apply to accountancy and accounting ethics were first introduced by Luca Pacioli, and later expanded by government groups, professional organizations. Accounting has been deemed difficult to control as accountants and auditors must consider the interest of the public while ensuring that they remained employed by the company they are auditing. Knowledge regarding the information of ethics helps accountants and auditors to overcome ethical dilemmas. Sometimes the decisions made not be beneficial to the

110.1 - The principle of integrity imposes an obligation on all Members to be straightforward and honest in