accounting essay topics

accounting essay topics

The Importance of Ethical Practices in Accounting

1. Introduction

Ethical principles are established for everyone, but accounting first of all implies the necessity to practice the highest ethical standards. The practice of accounting is directly connected with the professional relation based on trust between accounting informational consumer and information suppressor (or reporting accountant, for descriptive purposes. We will consider accounting denominator and accountant numerator). The nature of this relation is founded on the necessity of the accounting professional opinion. The fact of accepting the necessarily ethical opinion from outside users of accounting information. We consider the concept of the profession of “public.” The following characteristics: “standards that serve society, rather than the individual: it is related to work based on knowledge, professionalism, and openness; has freedom of action”.

Today, individuals and organizations support the idea of the necessity of ethical behavior in all spheres of life. Ethical behavior helps to shape the image of a personality and success. The image of any person goes before him or her. Drawing on your society’s experience will enrich your writing by making it more emotive. However, when the strength of unity does not work with the aim of keeping peace for all, it turns into pressure on the opinion and rights of the individual. “Excessive pressure is applied to the minority opinion in the name of real democracy, and the oppressor can be hidden from legal and social sanctions within the majority”.

2. The Role of Ethics in Accounting

Accounting is the cornerstone of financial reporting. False or misleading accounting practices harm governmental and private entities. Ethical and moral accounting professionals are needed and it is worth noting that they can be appreciated in equally for-profit and not-for-profit entities. In addition to ethical behavior because it is the moral thing to do, individuals and organizations are expected to act ethically because society demands transparency and accountability of financial information. The ongoing effect of financial scandals has pulled the accounting profession to the forefront, prompting members of society to further question the perceived moral decline in social values. A decade after the Sarbanes-Oxley Act of 2002 (SOX), a business workforce continues to face serious legal and ethical dilemmas in the wake of fraud scandals at home and abroad. It is certainly an uphill battle, but with the right education in ethics best practices, accounting professionals have an opportunity to prevent fraudulent activity.

Changes in society and advances in technology have created new ethical challenges in business. The ethical accountant should consider the outcomes of a decision from a multitude of perspectives including employees, creditors, customers, suppliers, governments, and special interest groups. Unlike other professionals, accountants have an obligation to all individuals or groups affected by their decision. Ethical behavior is not governed by a clear rulebook and requires individuals to take into account cultural norms, ethical principles, and the accounting profession’s code of conduct and social responsibility. Issues in accounting ethics can be controversial, but most ethicists and accounting professionals agree that approaches to ethical problems should begin with a comprehensive understanding of responsibility, whether placed on an individual or firm. Conducting business ethically provides an organization the credibility to operate.

3. Consequences of Unethical Behavior in Accounting

Those located at the top of the accounting business continuum have a significant level of responsibility for even an individual’s behavior who works in a small business regarding the accounting profession. It can be expected that the current professional opportunity structure in major accounting offices comes with a higher level of pressure leading to unethical behavior when weighed with the corresponding structural opportunities or lack of opportunities in the internal areas of the profession. A variety of adverse penalties including poor personal esteem and social ostracism seem to mitigate these pressures. However, the reality in some of the large accounting offices has not only been a lack of severe penalties for fraud but also the towering of accountants with a higher level of esteem, more income, and promotions when they have contributed to harming the public perception of the accounting profession, assisting in securing an engagement, permitting it to proceed, or in the worst-case scenario when they have sacrificed or withdrawn their professional integrity to continue the engagement.

The Enron scandal was one of the most notorious incidents of the early 2000s. The scandal attracted widespread attention among the public, as well as among accountants and auditors. Regardless of the factors contributing to the raised awareness of the profession, the spotlight is certainly not welcome. Not only was there dissatisfaction with the unethical behavior, but those who were involved in the accounting scandals disproportionately vilified employees and leaders of the accounting profession. The collective experience of scandals in recent years has also had a negative effect on the public’s perception of accounting. There is no doubt about that.

4. Strategies for Promoting Ethical Practices in Accounting

Employment of accounting graduates who are ethical. In the final analysis, accurate evaluation of the ethical behavior of accountants frequently comes down to a road decision on the potential employee’s energy, and activities associated to ethics. Because business schools prepare graduates for the professional life, then it makes common sense to both encourage and pressurize them to learn, recognize, and exhibit ethical behavior. By doing so, business schools interject ethics into the student’s attitude, and vigilantly scrutinize every student’s character as well as abilities. Such schools offer a good set of students owing to the stern demand, and admiration of a character that is integrated into the school’s purpose, responsibility, and uprightness.

Putting forth guidelines and rules that all employees can easily understand and follow. Nonetheless, an ethical code of conduct is not sufficient in itself. To be effective, guidelines for conduct must be firmly rooted in the organization’s culture. Every day, management’s conduct has to exemplify the standards and practices stipulated in the code of conduct; management also has to present an environment where ethics is encouraged, facilitated, expected and communicated. In the words of Hoffman et al. (2007), ‘A stated code of conduct is a polite idea, with the exception of management endorses it’. Therefore, corporate social responsibility is significant. For every decision, it is significant that the management ought to reflect, and assess the potential consequences of it. At the utmost level, the board of directors as well as executives should take part in the code formulation, decision-making, and selection of a justifiable compensation arrangement. To make certain implementation, firm’s incorporated ethics, and control system needs to be restored.

A number of practices have been suggested to foster and promote ethical behavior in accounting. Several of these are not unique to the accounting industry, per se, but can greatly enhance the culture of any organization. To encourage ethical behavior in accounting, the following strategies could be implemented:

5. Conclusion

It is feared that better than ethics and social responsibility, vocational objectives may glorify greed. Many students have expressed concerns with today’s trend professor’s pushing the business aspects of technology and downplaying the reality of their major as social sciences. Some of the comments have accused one African-American professor of refusing to confront the reality of racism, organized exclusion, ghettoization, and other important social issues in deference to technocratic pursuits. If Business is focused on wealth generation, to whom much money is given, much is required. Of it, or from it? Pope Francis wrote an article on “The Joy of the Gospel of Work” which then got everyone upset – those who were in and outside the Church; however, getting people excited is not a bad thing. Much of what is reported to the public by the popular press about business is not to get people warm and fuzzy; the results are often negative narratives. To regard work as something of inclusive value, it is important to ensure that accounting correctly and fairly communicates; that allows for the maximization of wealth but more human development and the common good of society.

The first year, new students at the university where the author taught accounting once were asked to write a note to themselves as to why they were at the university. Some of the responses related to career goals indicated a wish to make money. This is not a recent phenomenon as McKee, Elwood 1998, “Money, an American obsession subsidized by mass communications, does not buy happiness; but it’s a temptation many cannot resist. Students are loathe to continue the college education if grades are slippery; they ultimately lose faith in themselves and the productivity of what they are about, and they drop out [or, they may get Master’s degrees in Business Admin] or in some cases, worse still, they stay in college for years and spend more money with no clear or discerned goals]. If the teacher is to coax out the best from students, the teacher must help the students to discern in themselves what they are about and find within themselves the intellectual and emotional resources that will enable them to reach their goals.”