The Importance Of Accounting And Accounting

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All businesses, regardless of size, profit margin, or product or service need to have ethics and integrity ingrained into their culture. Ethics ensures the firm behaves responsibly and honestly with its customers, employees, shareholders, and the government. Honesty and good business practices will not only help retain and gain new clientele, but also help everyone to sleep at night with a clear conscious. The business environment has expanded in immensity and complexity within the last 100 years. It seems that business scandals, especially those relating to accounting and finance, have become more prevalent in the last 20 years. There are certain ideals that are expected of someone working in either business, finance, or accounting. These…show more content…
Job objectivity ensures the accounting professional report only the facts. These facts must not be biased towards the success or failure of an industry or company. Also, confidential information that has been disclosed or seen by the accountant in the process of performing their duties must stay confidential. Here, if the accountant spreads private information of the business to outsiders, this could have a negative effect on company stock, future outlook, employee morale, and the person may be held liable for defamation. Lastly, an accountant should operate without conflict of interest. For example, an accountant should not be on an audit team for a company they themselves hold stock of. The accountant runs the risk of losing their objectivity of the audit, and bias the reports in a positive light since it will also benefit them as a shareholder. There is good reason that people in the business world have such expectations of them, and that reason being is the devastation that is caused by misleading a company’s…show more content…
Accounting scandals, although seemingly prevalent in recent years, are nothing new. The later part of the 1990s saw such things as Cendant falsely reporting $500 million in revenue in order to meet expectations (Cendant Closes Fraud Case, 1998). Waste Management, Inc., and their auditing firm Arthur Anderson, paid fines to settle charges that it created audit reports that incorrectly inflated the earnings of Waste Management (Waste Management Settles, 2001). In reading about these scandals, a common theme is management was stating they were unaware of such unethical activity, and the firm was
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