Unethical Business Practices Of Multinational Companies

In this paper, I will explain if I believe whether a code of ethics should do more than the establish minimum acceptable standards. I will also describe the 5 cardinal virtues of professional accountings, whether there should be rules-based ethics standards. Lastly, I will compare and contrast the AICPA’s Code of Professional Conduct and the IFAC Code of Ethics for professional accountants.

Introduction In recent years, both domestic and abroad continued exposure accounting fraud, financial fraud and other cases, internal control has been a hot topic that people focus on. Accounting fraud has spread to all types, become a common phenomenon in the wider economy. In response to this, the recent discussion focused on improving accounting professionals (including accountants and CPAs,) of professional and ethical standards, to strengthen accounting practitioners and increasing the penalties for non-economic aspects.

Ethical Dilemmas for Multinational Enterprise: A Philosophical Overview Part One: Review Question #1 Multinational Corporations have always been and are currently now under harsh criticism. They are mainly condemned for exploiting resources and workers of third world countries, taking jobs away from the US industry, and destroying local cultures. Although there are negatives of multinational corporations, there are also positives. Business done overseas provides jobs for the people of the host country, improving the standard of living, and transfers technology. Richard T. De George explains moral standards, in five basic theses, that multinational corporations must adhere to in order to maintain corporate ethics.

AICPA Code of Professional Conduct Composition, Applicability and Compliance The Code of Professional Conduct of the American Institute of Certified Public Accountants consists of two sections—(1) the Principles and (2) the Rules. The Principles provide the framework for the Rules, which govern the performance of professional services by members. The

International Accounting Standards Board (IASB) As stated earlier, the IASB arose from specific needs of the accounting industry and the public. As international trade has increased, the need for transnational accounting information has increased as well. This sparked the demand for development of international accounting standards to make financial data between countries more comparable. In 1973, the International Accounting Standards Committee (IASC) was formed to develop these international standards. The standards issued by the IASC, prior to 2001, were called International Accounting Standards (IASs). In 2001, the IASC made the International Accounting Standards Board (IASB) the official international standard-setting body. The standards issued by the IASB are called International Financial Reporting Standards (IFRSs) (Schroeder, Clark, & Cathey, 2011, p. 82-87).

AICPA Code of Professional Conduct Provisions Identify 1 of the 6 principles from the AICPA principles section of the Code of Professional Conduct Provisions. The discussion board attempts to evaluate the Code of Professional Conduct Provisions as indicated in the AICPA principles section. One of the six principles of the code of

The introduction to the old AICPA Code of Professional Conduct of the American Institute of Certified Public Accountants provides guidance and rules for all members as it explains the composition of the code, application of standards and compliance enforcement procedures. The code consists of two sections principles and rules. The Principles provide a general framework for the Rules which CPAs have to adhere to the rules of the AICPA Code when practicing. The AICPA Code of Conduct consists of three levels: Principles of professional of conduct, Rules and interpretations and rulings. If a member violates the Code rules, disciplinary actions would be taken. The Principles of Professional Conduct (Sec 50) explains the responsibilities, public interest, integrity, objectivity and independence, due care and scope and nature of services for professional accountants. The rules of the AICPA Code are (Sec 90) Applicability and Definitions, (Sec 100) Independence, Integrity and Objectivity, (Sec 200) General Standards and accounting principles, (Sec 300) Responsibilities to clients, (sec 400) Responsibilities to colleagues and (sec 500) Other responsibilities.

The AICPA is a Code of Professional Conduct that inform individuals what they are mainly accountable for and what their performance on professional services should be comprise of. Throughout these codes, there are many guidelines that range from the most to least authoritative. The principles provide and overview of what the code of conduct is, meanwhile the set of guidelines helps enforces the code to individuals. The code of conduct has four parts including the preface, a part that applies to the individual in the public practice, business members, and the rest of other individuals.

This section is reserved for future literature regarding the rules a member should follow in regards to responsibilities they have to their co-workers and colleagues. The AICPA Professional Code of Conduct generally states that members have a duty to remain ethical and uphold integrity in practice and relationships. This would cover the professional behavior expected with colleagues. Stay tuned for official rules to be added and defined by the AICPA.

Introduction 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.

For nearly half a century, a movement has been underway to establish a high-quality, comprehensive set of international accounting standards, with the goal of facilitating international trade and investment. In the global capital market, differences in the rules of accounting for the purposes of recognition, measurement, and reporting of financial results have impaired the smooth transfer of information across borders. Given that it accounts for nearly a third of the global market, there is considerable pressure for the United States to conform to the International Financial Reporting Standards (IFRS), as promulgated by the International Accounting Standards Board (IASB). While moving to a single set of accounting standards could create

Source: http://www.ifrs.com/updates/aicpa/Backgrounder_pdf.html A set of internationally recognized accounting standards facilitates capital flows across borders. Globally accepted standards make financial information readily comparable for its users. Foreign investors are more inclined to put money into a U.S. company if they are familiar with the company’s financial reporting. Conversely, U.S. investors will find it easier and less risky to invest in foreign companies when they know the local accounting standards (Epstein 2009). This will make U.S. companies and capital markets more competitive, since it saves costly reconcilition of different standards. Preparers, investors, auditors, and others will benefit from these cost effieciencies, since a Results of an IFAC Survey among accounting leaders around the world with respect to the importance of convergence to International Financial Reporting Standards for economic growth in their countries:

M 2 Professional ethics Service Ideal The wellbeing of society The pursuit of excellence Community service Code of Ethics for Professional Accountants (APESB 2010) Ensure high-quality service consistent with the reputation of the profession. It provides guidance in conflict situations. Conceptual framework approach The code provides a conceptual framework approach to the application of the fundamental principles of professional conduct:

 Ethics in International Business Abstract International business ethics challenges the corporate world to deal with questions of what to do in situations where ethical standards come into conflict as a result of the different cultural practices in the nation. Since, there is this dilemma that has progressively troubled the large multinational corporations,

Indian and International Accounting Standards & Practices Introduction: Accounting Standards are used as one of the main compulsory regulatory mechanisms for preparation of general-purpose financial reports and subsequent audit of the same, in almost all countries of the world. Accounting standards are concerned with the system of measurement and disclosure rules for preparation and presentation of financials statements. They appear with a set of authoritative statements of how particular types of transactions, events and other costs should be recognized and reported in the financial statements. Accounting standards are devised to furnish useful information to different users of the financial statements, to such as shareholders,