Kingjewels: Ethical Leadership Practice

It would mean that their judgment has not been comprised. Objectivity is also a good ethical principle for an accountant to have. Being objective means that the accountant will not let personal issues get in the way of them making the decisions that need to be made for the good of the organization; using the facts not going on what anyone else says to make a decision. Integrity is another ethical principle that is good for an accountant to have; meaning that they are not going to allow misrepresentation of facts to be made known or recognized on the financial statement. They must maintain their integrity even if it means saying no the boss; when it comes to printing the facts on the financial statement.

The act is an exhaustive piece of legislation that contains eleven major section and some of the most important titles outline requirements on auditor independence, analyst conflict of interests, corporate responsibility, enhanced financial disclosures, internal controls assessment, and corporate fraud accountability (Bainbridge, 2007). One of the main benefits of the legislation is to establish auditor independence requirements and rules for the prevention of conflicts of interest in particular by prohibiting auditing firms from offering other services. Prior to Sarbanes–Oxley, the auditing professionals were self-regulated and the decisions that controlled the industry, such as violation of ethical standards, were made largely by auditors themselves (Verschoor, 2012). In order to prevent conflict of interests, the Sarbanes–Oxley Act grants the PCAOB authority to oversee and regulate auditing firms, conduct investigations, and impose disciplinary sanctions against accounting firms (McDonough, 2004). Another provision of the Act is requiring senior executives to be personally accountable and responsible for the financial information reports by certifying that the information is correct.(Welch, 2006). A byproduct of the law implementation is a significant quality improvement on accounting practices;

Contrary to some belief, accounting is not a “cakewalk” career. Accountants do not sit at a desk one-hundred percent of the time crunching numbers that always add up perfectly. In fact, accounting fraud is one of the largest scandals found today. When an accountant enters an engagement with a client, who are they liable to? Certainly not

Avolio, B., & Gardner, W. (2005). Authentic leadership development: Getting to the root of positive forms of leadership. Leadership Quarterly, 16(3), 315-338.

Accounting Ethics disciplinary proceedings may be brought against an accountant by professional societies such as the AICPA. Accountants have great responsibilities to their clients

the AICPA ( American Institute of certified public accounting) values and vision statement said that they are committed to upholding the highest ethical standards to maintain trust and credibility with colleagues, members and the public. Obviously, Thorne will violate the rules if he accept this

Ethical Standers and Leadership Paragraph 1: Book Within the text book, Introduction to Leadership by Peter Northouse, two significant chapters are: Chapter one-Being a leader and Chapter eleven-Addressing Ethics in Leadership. Both chapters embrace the key importance of a leader being focus oriented and maintaining integrity. In the first chapter, Northouse states: "Leadership is a process whereby an individual influences a group of individuals toward a common goal" (3). In the quote, Northouse emphasizes the importance of a group.

In January of 1988 the AICPA introduced the Integrity and Objectivity Rule number 102. The rule states that a member shall maintain objectivity and integrity, shall be free of conflicts of interest, and shall not knowingly misrepresent the facts or subordinate his or her judgment to others (AICPA). Rule number 102 has three separate violation interpretations. The first interpretation of rule 102 states that a member that makes, permits, or directs another to make materially false and misleading entries in financial statements is a violation. A second interpretation of the rule states that if a member fails to correct an entity’s financial statements or records that are materially false and misleading when he or

The effective leader is an inquiry-based practitioner who shapes their role, and the direction of the organization, through informed decisions from valid and reliable data.

In the wake of accounting malpractices across several companies in the United States such as Enrol Corporation, Tyco International and WorldCom, there has been a lot of attention with regards to the accounting practices in the corporate sector. Specifically, the Sarbanes – Oxley Act (SOX) which was passed by congress in 2002, was aimed at addressing the situation by regulating fraudulent accounting practices such as bribery and wrong entries in books (Williams & Elson, 2010). While regulation has its own limits, it is hoped that ethical principles can go a long way in keeping accountants in check. To this end, a number of institutions formulated within the accounting professions such as the AICPA have come up with codes of conduct to guide the action of members and ensure that they act in a way that is morally right and in line with the profession.

The credibility of accountants came under fire when Arthur Andersen looked the other way in the Enron scandal and paid little attention to red flags with the WorldCom endeavor. It was up to the government to set up new regulations that all accountants must adhere to when performing audits so independence, integrity and ethics are key values. The IFAC Credibility Report stated that “improving the credibility of financial reporting requires action at all points along the information supply chain that delivers financial reporting to the market. Those who contribute to financial statements share a common duty to the public to promote the goals of clarity, integrity and transparency.” The responsibility of retaining credibility in the accounting

The AICPA Code of Professional Conduct provide guidance and rules for certified public accountants’ professional and ethical responsibilities. The code establishes standards for auditor independence, integrity and objectivity, responsibilities to clients and colleagues and acts discreditable to the accounting profession. The AICPA has established a conceptual framework for issues and threats that are not otherwise address in the code. The AICPA Conceptual Framework is a four-step approach consisting of identifying threats to compliance with the rules, evaluating the significance of the identified threats, identifying new and existing safeguards, and evaluating safeguards to determine if threats are reduced to an acceptable level.

Ethical Dilemma in Leadership Ethical dilemmas happen when you choose between what is morally correct behavior and behavior that is in conflict with your values. Ethics and morals are conjoined. They both deal with behavioral actions of right and wrong. Difficult decisions are unpleasant choices were one can resolve to make in everyday life. Making tough choices involves ethical reasoning.

The Institute of Charted Accountants of England and Wales (ICAEW) issued a technical bulletin Audit 01/03 recommending that audit reports now should have disclosure limiting liability (The Institute of Chartered Accounants In England and Wales, 2003). On the opposite side of the argument the question was raised as to whether the added disclaimers undermine the accounting profession and raise more unanswered question than they leave answered. The Association of Chartered Certified Accountants (ACCA) issued a technical factsheet regarding this disclosure stating the “their incorporation as a standard feature of the audit report could have the effect of devaluing that report” (Technical Factsheet 84 - The Use of Disclaimers in Audit Reports, 2004). Meanwhile, academic circles seemed to follow the factsheet from ACCA, Dr Hooper agued that the “disclaimers undermine the concept of public interest and are more like a screen to legitimate the profession (Hooper & Xu,

The first part of subpart C in Circular 230 is about sanctions against accountants. This says that an accountant can be disbarred, suspended, censured, disqualified, or pay a monetary penalty if they do not follow the rules set out for them. If they are disqualified then you can’t testify or provide evidence in court. The monetary penalty that can be given is not allowed to exceed the accountant’s income from the activity that caused the punishment.