Ethics Standards And The Field Of Accounting

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

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

“ 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).

Ethics are crucial to the accounting profession and the business world, so choosing an ethics system to base your moral decisions on is extremely important. Accountants and all business professionals will be confronted with moral dilemmas on a daily basis. Being strong in your faith and knowing what you believe in will help you to always make the right decision. Based on this reasoning, this essay will explain why deontology is the best ethics system for the accounting profession.

Ethics are a major issue which is a reason why the Sarbanes-Oxley Act was implemented. Before the Act, firms focused on growth but not as much on professional values. Revenue was the driving factor in auditing firms, and auditors were required to find new clients, keep existing clients, and cross selling. There were also penalties for not obtaining these requirements which could lead to termination (Jones III & Norman 2006). Since the Act many organizations have now implemented a code of conduct (ethics) which sets standards of how an auditor is supposed to act or a place to go to seek advice on handling different situations. The code of conduct or ethics can be viewed as a way an organization wants one to act or behave (Canary & Jennings 2007). Since implementation ethics is being taught more in college classes, and the reason for this is because of the huge scandals that have occurred. One study showed that the key leadership roles in a company often have a MBA, so teaching ethics will reach those leaders, and possibly prevent future ethical dilemmas (Sulivan, D. 2010).

When functioning in the corporate world, it is an essential to include moral ethics. Ethics is also particularly imperative when laboring with financial information. It is very hard to have faith in someone managing plenty of money. Corporations in the past have distorted their financial statements in regulation to look superior to stockholders, without thinking of the penalty that may be a consequence if they get caught. If a corporation does not encourage good quality ethical conduct within the business, it is

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

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,

First, he noted that the field of financial accounting is a very dynamic field and that what is normally taught in class many not reflect what happens in the field. He stresses the fact that the field of financial accounting is very flexible and dynamic and that new norms and codes are often initiated on a constant basis depending on the emerging situations. He gave a number of organizations that have failed despite the fact that there are measures meant to address the issue of financial fraud. He gave an example of a number of companies who have failed despite the fact that there are good accounting principles and good accounting personnel. Homan concluded that financial accountants should always be ready to meet new encounters and respond ethically. In fact Homan spends greater part of its speech in explaining how ethics are crucial in financial accounting or forensic accounting. He emphasizes the fact that ethics are even powerful than the financial theories taught in class. He gave an example of companies where senior management can collude and commit a financial fraud yet they know all the financial principles. In such cases, Homan state that such managers lack the ethical

The accounting professional is an industry in which professionals are commonly faced with hard decisions to act in an ethical manner. According to Enofe, Nakpodia,& Moruku, “Ethical guidelines do not aim to provide instant solutions for all ethical issues, rather, ethical guidelines aim to help in the decision-making process” (2014, p. 144). For the accounting profession, such guidelines and regulations are set forth in the AICPA’s Code of Professional Conduct (code). This code helps to set boundaries for accounting professionals’ interactions with the public, their clients, and also their colleagues (AICPA, 2014, p. 5).

The textbook assigned for this course highlighted many important lessons that will guide me in my future as a professional. This course allowed me to learn about many companies who were affected due to the lack of ethicality in their culture and employees that will eventually lead the company to misstate its financial statements. Given that the name of the course is “Ethics in Financial Reporting and Accounting,” I think this book gave an excellent overview of how to avoid financial troubles when working for a public company or a professional services firm. While I think every chapter provided important ethical concepts to be taken into consideration when working in a professional career, some moral lessons caught my eye as I learned about them while I read the textbook. These five lessons include identifying ethical blind spots, avoiding motivated blindness, tone at the top and independence, ethical conduct and its effect on financial statement fraud, and the importance of ethical standards and cultural values when engaging in global business. I think these five lessons are the most valuable ethics lesson that will live on with me forever into my professional career.

Accounting professionals consider standard practices of accounting and board of accountancy rules when creating ethical standards. Accountants also consider state and federal laws. Ethics and the law works hand-in-hand therefore should be on the minds of those considering the commission of fraud. The Chief Financial Officer (CFO) of Excello, Terry Reed, was considering doing such by posting a $2.1 million transaction to raise year-end earnings.

Financial professional need to carry out the responsibilities and honest, due care and carefulness, always do the best independent judgment. Besides that, it also assist in the making of accurate, fair, full, understandable and timely disclosure in document and report that the firm and its subsidiaries file. Against the financial code of ethics may also consider as violations of law, which may cause the firm and the owner to criminal or civil penalties.

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

Integrity – Accountants should always ensure that they are honest and straightforward in their activities with every instance that they have clients. They should always maintain the lines of duty and maintain business relationships during all official duties (Nobes, 2015).