However, those dealing with money and sensitive personal and company information must adhere to strict ethics and integrity standards. This is imperative to gain and retain the trust of clients, co-workers and business partners. Integrity is generally considered one component in the ethical standards of accounting practices. Professional Competence Accounting is a detail-oriented career that requires knowledge and skills to do the job correctly.
Shareholders, potential shareholders, and other users of the financial statements rely heavily on the yearly financial statements of a company as they can use this information to make an informed decision about investment.
In Germany, accounting legislation is governed by "tax law"; in Sweden, by "accounting law"; and in the United Kingdom, by the " company law ". In addition, countries have their own organizations which regulate accounting. Luca Paciolithe "Father of Accounting", wrote on accounting ethics in his first book Summa de arithmetica, geometria, proportioni, et proportionalitapublished in These various groups have led accountants to follow several codes of ethics to perform their duties in a professional work environment.
Accountants must follow the code of ethics set out by the professional body of which they are a member. United States accounting societies such as the Association of Government AccountantsInstitute of Internal Auditorsand the National Association of Accountants all have codes of ethics, and many accountants are members of one or more of these societies.
However, because membership to the organization was voluntary, the association could not require individuals to conform to the suggested behaviors. Failure to comply with the guidelines could have caused an accountant to be barred from practicing.
When developing the ethical principles, the AICPA also considered how the profession would be viewed by those outside of the accounting industry. Recognize issues in accounting that have ethical implications.
Develop "a sense of moral obligation" or responsibility. Develop the abilities needed to deal with ethical conflicts or dilemmas. Learn to deal with the uncertainties of the accounting profession. Appreciate and understand the history and composition of all aspects of accounting ethics and their relationship to the general field of ethics.
Loeb  InStephen E. Loeb proposed that accounting ethics education should include seven goals adapted from a list by Daniel Callahan.
Requiring it be taught throughout the curriculum would necessitate all accounting teachers to have knowledge on the subject which may require training.
Supporters point out that ethics are important to the profession, and should be taught to accountants entering the field. Cottel argued that in order to uphold strong ethics, an accountant "must have a strong sense of values, the ability to reflect on a situation to determine the ethical implications, and a commitment to the well-being of others.
Accounting scandals Accounting ethics has been deemed difficult to control as accountants and auditors must consider the interest of the public which relies on the information gathered in audits while ensuring that they remained employed by the company they are auditing.
Due to several accounting scandals within the profession, critics of accountants have stated that when asked by a client "what does two plus two equal?
The role of accountants is critical to society. Accountants serve as financial reporters and intermediaries in the capital markets and owe their primary obligation to the public interest. The information they provide is crucial in aiding managers, investors and others in making critical economic decisions.
Accordingly, ethical improprieties by accountants can be detrimental to society, resulting in distrust by the public and disruption of efficient capital market operations.
Every set of published accounts is based on books which have been gently cooked or completely roasted. The figures which are fed twice a year to the investing public have all been changed in order to protect the guilty. It is the biggest con trick since the Trojan horse.
In fact this deception is all in perfectly good taste. It is totally legitimate. It is creative accounting. The scandals were the result of creative accountingmisleading financial analysisas well as bribery. One of the most widely reported violation of accounting ethics involved Enrona multinational company, that for several years had not shown a true or fair view of their financial statements.Discover the Easiest Way to Complete Your Accounting CPE Hours.
Obtaining your CPA license is just the beginning of your education. To maintain your license, you need to complete continuing professional education (CPE) courses. Ethics - are they really important in accounting? In this lesson, we will discuss what ethics are and what role they play in accounting; we'll also review a case that is deeply rooted in ethics.
Assignment: Ethics in Accounting. Due Week 9 and worth points. Effective financial reporting depends on sound ethical behavior. Financial scandals in accounting and the businesses world have resulted in legislation to ensure adequate disclosures and honesty and integrity in financial reporting.
Many accountants engage in the practice of public accounting, which involves providing audit, tax, and consulting services to the general public. To engage in the practice of public accounting usually requires one to be licensed. Ethics require accounting professionals to comply with the laws and regulations that govern their jurisdictions and their bodies of work.
Avoiding actions that could negatively affect the reputation of the profession is a reasonable commitment that business partners and others should expect.
accounting practices. 12 This begs the question of exactly how prevalent ethics are in the field of accounting and how often managers opt to exercise actions based on honesty rather than self-interest.