writing an academic accounting essay

writing an academic accounting essay

The Importance of Ethics in Accounting

1. Introduction

A possible approach to understanding this requirement is to consider that the disclosure of financial information, governed by rules and disclosure practices, should contribute to the best relational organization among the various parties that directly or indirectly participate in the organization.

Companies are agents that contribute to the well-being of society. Therefore, society requires accurate information to ensure that social and economic interests are not jeopardized. Consequently, the responsibility and ethics of the organization lie with the accountant. Organizations rely on the accounting profession and consider it essential to provide accurate and reliable financial statements in a professional manner.

The accounting professional, along with a set of principles, also needs to have good technical competence. In addition to being considered an organizational profit and shareholders, they must ensure that the information on the company is not only compliant, but also trustworthy and reliable. This is important for society in general and for the different stakeholders in particular, as it allows the accountant to be a force of progression.

The accounting professional lives in an era full of challenges, with society demanding complete trustworthiness in their work. This requires them to show themselves esteemed in the fulfillment of their mission, and if possible, to go beyond expectations. Ethical principles are certainly important to guide accountants, who play a crucial role in creating an environment of stability and trust. This is essential for the attainment of the organization’s productive purposes.

2. Ethical Principles in Accounting

Sometimes, there are different perceptions related to their preparation, and that is including some concepts like mathematics or science. This acknowledgment becomes especially more interesting if we realize that accounting professionals, especially public accountants along working on the vouching of corporations, do not achieve functions of increasing the choose requirements, such as worldwide corporations. This is one of the key issues and grounds for questions about the ethics and levels of ethics of accounting professionals. It is suggested that ethics in business can be explained and enforced through a blend of usefulness and honest obligations. In addition, the case examine effects propose that customers replied more confidently, reinforcing that students of each position perceived the problem highlighting the bonus charge towards accounting actions.

Ethics is associated with moral principles as these are the values and rules that help us tell right from wrong. It also consists of a set of operational techniques and monetary principles adopted by the accounting profession. Ethics is essential to the accounting occupation because it involves the ethical standards for the accountancy discipline. Primarily, the values which underlie the accounting occupation as well as the honest obligations of accounting professionals. However, ethical conduct also has professional ramifications with relationship to both the public interest and the degree to which accounting professionals’ livelihoods might be established related to their decisional performance. Accounting production are nearer to all electric reality, and the integrity of these statements is reasonable to ensure for many reasons, being of intended than the au courant virtuous encouragements of accounting professionals. As statements could intact and they represent the plans communicated by the human beings who prepared them.

3. Consequences of Unethical Accounting Practices

A research study within Psychological Science in the Public Interest titled “Causal Attributions and Ethical Judgment,” studied the relationship of welfare fraud types on ethical judgments, in which participants concluded certain acts more ethical than others. These attributions play a role in ethical judgments because they can result in punishment or a perceived lack of need for punishment based on the receivers’ perceived motivation. If an individual behaved unethically, there needs to be consequences; however, this often remains not the case as the motivation of individuals becomes relative and they tend to believe “the ends justify the means.” If the motivation of individuals remains immoral, then there does need to be consequences for the actions. To not do so permits and encourages future unethical behavior within the individuals and the accounting world that may only be adding to the already existing allure of acting in one’s self-interest. Ethics are key to accounting for the importance they play in ensuring the reliability of financial information. If consequences are not put in place for a breach of ethical conduct, this only serves to the detriment of investors, creditors, and institutions within the economic market. Unethical conduct code within the accounting profession of an organization should not be seen as just a cost-benefit analysis or IFAC’s directive from “the global voice of the accountancy profession.” It may indeed affect society as a whole more than when other professions behave unethically as the accounting profession is the cornerstone of any civil society.

When employees or accountants act unethically, the impact on the company can be quite damaging. Employees may also behave unethically because they feel it is what their coworkers expect as part of working for a company or they may behave differently than they personally believe is acceptable as the pressure to conform escalates. This can lead to a double victimization in that they may fear devaluation by their coworkers if they do not act unethically and devaluation by themselves if they do act unethically.

4. Measures to Promote Ethical Behavior in Accounting

Professional accounting organizations regularly issue technical releases addressed to the practicing members to whom compliance with the code is mandatory. The purpose of the releases is to allow members to have a resource to refer to so that they may be more aware of emerging issues and potential areas of difficulties. In response to similar requests, the AICPA issued a release to its members entitled “Independence – Frequently Asked Questions.” It is clear from reviewing this and other technical releases that the association is making an honest effort to raise the membership observance of the code. Some organizations have created committees to draft an interpretative response aimed at addressing the need for the resolution of issues of their members that will consistently protect the public interest. Finally, professional accounting bodies spend large sums of money on litigation and ethics. These litigation proceedings are published as part of the efforts of the professional accounting bodies to remind the professionals of significant cases that relate to the code.

There are a number of measures taken by various professional accounting bodies to promote ethical behavior among their members. To ensure that their dedicated members act in accordance with the fundamental principles of their ethics, professional accounting organizations have established rules of professional conduct in the form of a code of ethics. The code ensures that the accounting profession remains vital to and respected by its national and international members and is universally recognized by society. Most professional accounting bodies adopt the provision form of the code. Under a provision format, a code consists of broad principles, as well as specific rules derived from these principles. The code of professional conduct specifies mandatory and essential behavior. Consequently, it uses powerful, clear, and concise language to convey the principles and the profession’s expectations.

5. Conclusion

Conventional teaching methods have been accused of oversimplifying ethical phenomena by adopting a somewhat impractical, abstract, and static approach to ethics. Ethical matters are treated in isolation. Attention has been paid to what ethical issues may arise in the financial environment, but lecturers still seem to shy away from dealing with reality. When they do address reality, it is done in a general format.

Despite the many decades of talking and writing about the importance of ethics in the accounting profession, the message that ethical underpinning is an essential component of the accounting profession and for managing the finance function in any organization seems to have been lost. It would appear that, more and not less, the profession is faced with unethical challenges. The challenges facing the profession corroborate the fact that extensive classroom or lecturing on the importance of ethical conduct does not necessarily mean that the message being imparted has found roots in the fertile soil of the future accounting professional.

Ethics is a philosophy, a science, and the foundation for the accountancy profession, and now is the time to restore within the accountancy profession, or more correctly speaking, to re-establish the importance of ethics within the accountancy profession. The Enron, Worldcom, and other major bankruptcies in the United States have pointed a finger at the role of accounting officers and, generally, at the auditing profession. After all, these are the professionals who are qualified to maintain and practice a high standard of ethical conduct and behavior, not only among themselves but also to impart the necessary values to the next generation of professionals.

Currently, there is a great deal of attention being focused on the breakdown of ethical behavior in companies, and in particular, some highly visible and deeply disturbing breaches of ethical standards by executives in some of the world’s largest companies. While it is a simple matter to stand in judgment and accuse executives of wrongdoing, it should not diminish the importance of the need to address the causes of unethical behavior. It is crucial not to lose sight of the primary causes for the failure of an executive to behave ethically.