Accounting Ethics: The Importance Of Ethics In Accounting

970 Words 4 Pages
Various accounting bodies establish their own ethics board that is in charge of creation and implementation of ethical standards. In America, these guidelines are established by the ethics committee of the American Institute of Certified Public at domestic level, with contribution of state level establishments. Execution of these ethical guidelines is performed by these bodies and by other legal bodies including SEC. Many accountants and firms have been punished by these bodies for their unethical practices. Some of the time, in accounting sphere, organizations issue their own set of ethical standards.
Ethical Issues in Accounting
Accounting ethics is concerned with making ethical decision while preparing and presenting the financial statements
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There is severe punishment for tampering or distorting the accounting data or misreporting and other unethical behaviour.
The Importance of Ethics in Accounting
A professional’s key attribute is compliance to a thorough set of ethical rules. When a person deviates too far from ethical guidelines, his dependability and judgment become questionable. As much significant the understanding and upholding ethics is in other professional disciplines, it is equally important in accounting discipline.
Organizations are heavily dependent on accounting ethics. Investors, creditors and managers cannot trust the financial data’s accuracy unless they are confident that the financial accounting practices of the accountants responsible are straightforward, honest, reliable in harmony with the industry standards. If accounting ethics and is not maintained, investors and creditors might be susceptible to
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Professional Competence and Due Care: An accountant l has an obligation to have proficient skills and information to provide competent services to clients. He should be committed and dedicated and must act as per the standards applicable when providing his services. Due care requires accountants to observe all accounting standards and to have competence, consistency and a comprehensive understanding of financial information.
4. Confidentiality: An accountant should not disclose confidential information of his clients to third parties without a professional or legal reason to take such step.
5. Professional Behaviour: An accountant should not involve himself in any act that dishonours his profession and ought to obey the rules and regulations established.
Why Accountants act Unethically?
There can be numerous reasons as to why accountants act unethically. The most common reason being the personal financial issues. Many of the accounting scandals that have occurred in the past showed how an individual, by exercising unethical practices gained a good amount of money. Moreover, in a pressure to deliver good results, some organizations implement these unethical practices. Some organizations also do this so that they do not have to pay large amount of

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