“ 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).
I’d like to point out that ethical violations are relative to the date and location of the ‘violation.” As we have evolved and become responsible for the welfare of the individuals, what’s considered morally correct has evolved. The ethical constraints have increasingly become more stringent over time. People pushing the boundaries of what’s legal often create awareness that results in the establishment of laws intended to protect humanity. Despite the general conscious about human research requiring strict guidelines, it wasn’t until 1947 that ethical guidelines were clearly defined in the Nuremberg Code (Horner, 2011). According to rule 1, “the voluntary consent of the human subject is absolutely essential,” was clearly violated in during
Reporting standards are directly related to the communication of the auditor’s opinion. The reporting standards are used to support the auditor through review of the audit work and financials to formulate an opinion. The following is the list of reporting standards (Pany & Whittington, 2015):
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
Clarified statements on auditing standards (SAS) are issued by the Auditing Standards Board (ASB). SAS #122-127 were effective for audits ending on or after December 15, 2012. The ASB has completed the Clarity project with the issuance of SAS # 128 in February 2014, effective for audits of financial statement for period ending on or after December 15, 2014.
The accounting system is constantly changing. During these changes, it is important for accountants to adhere to the high ethical standards that they have always lived by. Adhering to the high ethical standards is an accountant's obligation to the public, the profession, and themselves. An accountant's ethical conduct usually lies within four different areas. This includes competence, confidentiality, integrity, and objectivity. NYSSCPA.ORG states, "Members also have a continuing responsibility to cooperate with each other to improve the art of accounting, maintain the public's confidence, and carry out the professions special responsibilities for self-governance," (Article 1).
Accountants and auditors are often faced with having to make decisions that bring ethics into question. The American Institute of Certified Public Accountants (AICPA) sets the standards for professional conduct that dictates what accountants are allowed to do and what they are not allowed to do. However, issues do arise that have not been addressed by the AICPA and when this occurs it is up to management to use their best judgment to make a determination about the ethical implications of their actions (Allen, 2011).
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.
A code of ethics is a set of written principles regarding conduct and behavior created by the organization to serve as a guide. The purpose of ethical codes is to give its employees, management, and any interested party a reference point that adheres to company policy, standards, and ethical beliefs. The code is made visible to the public to ensure professional integrity, quality, and to prevent misguided conduct. Regardless of the organization or governing body a code serves as a go-to guide because ethical issues can stem from anywhere at any given time. The Code of Ethics for Nurses is so dynamic because as technology changes, so does the code to ensure that updated knowledge is provided to healthcare workers as they address new ethical
My personal Code of Ethics includes Respect, Integrity, Fairness and Caring. Some situations in life may be subjective, but what matters is making sure the results are fair for all parties. Through the years I have found identifying and setting personal values to be increasingly difficult since the right decisions aren’t always appeasing to all that are involved. Every decision made or not made is definitive of myself, and in believing so removing the need to conform to standards imposed by society.
This memo serves as notice that we will soon initiate efforts to develop and implement an ethics program as well as the appropriate training and an effective way to monitor those plans. As you are aware, consumers and partners want to work with companies they can trust, and having a program that will build management skills and effectively structure business controls is a great way to become transparent and build that trust. Overall, an effective ethics and compliance
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
In current auditing praxis, few concepts are as important as auditor independence. The product of an audit is neither the auditor 's report nor the investigation itself, but rather the increased credibility attached to the audited financial statements. The key factor