The Ethical Challenges of Professional Practice

1949 WordsApr 6, 20098 Pages
The Ethical Challenges of Professional Practice Prepared by: Malgorzata Delimat Introduction In recent months, a sense of chaos has prevailed in Ireland. Scandals, which emerged in banking sector, have done horrendous damage to credibility of accountancy profession and reputation of Irish financial system. In these difficult times, it is very important to understand what the ethical challenges of accountancy profession are. As professionals, accountants are required to act with integrity and professionalism. They need to understand that ethics and compliance are very important in their professional life. Corporate collapse of Enron, WorldCom, and recent banking scandals have shown that…show more content…
Professional accountants have to avoid compromising and they should see the challenges created by personal relationships or financial involvement that may threat their objectivity. Independence of external auditors can be seriously challenged by their relationship with the directors. Directors’ remuneration and even their position within the company may depend on the reported financial performance of the company. For this reason, directors may try to influence or put pressure on auditors. Without strong character and strong personal ethical values, auditors may not be able to give independent opinion. Challenge to be ethical As economic conditions worsen, more businesses are under the pressure to meet their financial targets. These conditions lead to increased level of fraud and unethical activities. In these difficult economic conditions, ethical and professional responsibility issues present increasing challenges for professional accountants. For example, professional accountants can be more tempted to engage in creative accounting in order to provide misleading information on financial position of company. Creative accounting involves manipulation of financial numbers, usually within the letter of the law and accounting standards, but it is very much against their spirit as it is intended to deceive users of financial
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