Ethics has become a more central issue in the field of accounting in the past decade, due to the Enron scandal and other similar ethics breaches at large corporations. One of the results of this newfound focus on ethics is the recent rewriting of the Code of Ethics of the American Institute of Certified Public Accountants (AICPA, which is the American national association for certified public accountants), in order to better educate practicing accountants on acceptable practice. Another is a greater interest in how ethics are incorporated into the education of prospective accountants, raising questions such as whether addressing ethics within and across a variety of accounting courses is adequate, or if a separate course devoted entirely to …show more content…
Considering why unethical choices are made aids in creating solutions that will be efficacious; solutions that do not address the root causes of the problem are less likely to result in change. One reason an accountant might not make an ethical decision in a particular circumstance is lack of knowledge; he or she may not know what the ethical choice in that situation is. Another reason an accountant might do something unethical is lack of prudence; he or she may know the ethical actions that should be taken, but choose unethically, either because they are being pressured by others to do so--and perhaps threatened with the loss of significant income or even their job--or simply for his or her own personal or company gain. These underlying roots of breakdowns in ethics are important to keep in mind when thinking of ways to improve ethical …show more content…
On the negative side, these changes reach only new accountants planning to enter the field. On the positive side, the college environment allows for more thorough and in-depth approaches than, for instance, a one-time conference on accounting ethics. Two intriguing approaches to ethical study in accounting are gleaning knowledge from other fields in which ethics is of high importance (Liu, Hao, & Yu, 2012) and applying a religious form of pedagogy to its instruction (Van Hise & Massey,
This organization has been setting ethical standards and publishing the Code of Professional Conduct for the profession since the early 1900s. A Code of Professional Conduct is necessary for any profession to help maintain strict ethical standards. This organization is the basis of ethical reasoning in the accounting profession because of what the Code of Professional Conduct covers. The code is comprised of a preamble and six articles. The preamble and the six articles serve as a foundation to provide guidance and guidelines for accountants to overcome any emerging ethical issues with ease on a daily basis. The six articles’ purpose is to protect the public, investors, and creditors. The AICPA Code of Professional Conduct consists of: Responsibility, Public Interest, Integrity, Objectivity and Independence, Due Care, and Scope and Nature of
It is an organization that has the largest amount of members representing the accounting profession. The AICPA used to have much more power than they do today, but due to changes in the profession, they no longer create the standards like they used to. And, even though they are an American based organization, they have much to do with international accounting. Like mentioned above, the AICPA tends to focus on protecting the investors, rather than the businesses themselves when it comes to their ethical standards. They focus a great deal on things like integrity, public interest, objectivity and various others. The almost 200 page code of conduct includes all of the ethical rules every one of the over 400,000 members of the AICPA should follow. This is just one of the many different rules and
In today’s global society, a Code of Ethics policy is used to label established, acceptable behaviors among that industry’s business associates, potential investors, and the corporation’s executive officers and employees, and most important, the consumer (Ethics Resource Center, 2003). In an attempt to promote an increased efficiency and productivity potential level, among employees and prospective clients, a corporation’s standard Code of Ethics should guide its members toward a more in-depth examination of their personal moral activity, and how these actions affect the people or acquaintances they encounter. A company should utilize this strategy as a model for the professional behaviors and responsibilities of its constituents, and proves the occupational advancement of that business. Ethics are important in every level of a corporation, but specifically in the day-to-day actions of its members, and the image the company broadcasts to its associates is fundamental in building a stable business foundation. These pledges are a vital communication tool used to covey the firm’s standards for business operations, and predominantly, its relationships with the surrounding communities (Ethics Resource Center, 2003).
...urvey of ethical behavior in the accounting profession. Journal of Accounting Research, 9 (2), pp. 287-306.
While this is an ambiguous subject, wracked with speculation and ambivalence, it is an appealing topic of study. A curious facet of the ethical dilemma is that it transcends various fields of interest. The ethics issue is scrutinized by philosophers and psychologists, but this theme is frequently introduced in other curricula. Accounting, for example, has its own set of ethical mandates. Moreover, nearly every profession is impacted by a generally accepted code of ethics – doctors, lawyers, contractors, and the list goes on! In fact, almost every day an individual is confronted with a moral decision.
As an individual and ambitious accounting student with plans to pursue a career in public accounting, I recognize the importance of understanding my core personal values and behaviors that guide the ethical principles of my everyday actions. I recognize that I have a responsibility to myself, family, future colleagues, future clients, and the general public to follow certain guidelines and conduct myself in an ethical manner. Furthermore, I acknowledge the idea that ethical dilemmas will occur, but I am committed to my “Personal Code of Ethical Values” (as seen above) that represent my desire to live ethically in every facet of my life.
Crane, Andrew, and Dirk Matten. "Questioning the Domain of the Business Ethics Curriculum." Journal of Business Ethics 54.4 (2004): 357-69. Web.
In 2005 Dellaportas et al. (p.xvii) identified that accountants and other business professionals are often criticised for lacking the ethical sensitivity to recognise ethical dilemmas when they arise. They said that these professionals focused too much on the technical issues and overlooked the moral dimension. Dellaportas et al. concluded that it is critical for students to be sensitive to the moral components of seemingly technical questions. There are many ethical theories that students can be taught to help them recognise and resolve ethical issues. This essay will focus on virtue ethics, deontological ethics and how these can help students in their professional career.
Deontological and utilitarianism are the two type of ethics system which characterizes ethical decision-making with respect to organizational culture and the accounting profession (Pointe Cast Presentation, n.d.). The paper presents in the following section the diverse approaches provided on the two ethical systems.
Recall the tale of an impoverished man who steals a loaf of bread to feed his starving family. In the instance when two moral obligations collide, the only way to comply with one is to violate the other. No matter which course is chosen, the other must be ignored.”(Freeman, Engels & Altekruse 2004) Stealing and breaking the law challenges the philosophy of breaking the responsibility of caring for one’s family. Accountants need to think clearly, challenge the possibilities, understand the options, and acknowledge the consequences. The choice to steal bread will vary from one person to another, but as Christians, dying of hunger is more of a reward than a consequence. Accountants can learn from examples of people and companies who have been faced with pressing ethical dilemmas. Accountants can learn from Bernard Madoff and his $61 billion ponzi scheme that ruined thousands of people’s life savings (Freshman 2012), or Enron “circumventing the rules, temporarily changing or suspending the rules, and outright thievery to achieve his objectives” (Gini 2004). Knowledge about the past will lead people to make wise ethical decisions. The world can clearly see the consequences that these people and firms have undergone and do not want to follow in that path. There are responsible businesses, like Frito-Lays who have a major go green campaign. They have a better business by reducing their natural
Every profession faces a multiple of ethical challenges on a daily bases, this can be clearly witnessed in the accounting profession. The main focus of this literature review is to discuss the ethical values held in this profession and to also explore the ethical challenges that they face. Professional ethics for accountants is all about making sure that accountants carry out their duties to the highest standard possible and in a very professional manner. A code of ethics is designed to make sure that ideal behaviour is being carried out and it must be enforceable and realistic. From reading a variety of literature the core principles of the code of ethics are as follows: integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. Although there are a large amount of ethical challenges that could arise when the professionals are complying with the code of ethics, this review will focus on some of the major ones.
Our group believes that there are several factors that contribute to poor ethical analysis, decisions, and self-destructive behavior. On an organizational and industry level, some of those factors include loose ethical standards being put into place, inadequate enforcement on the part of managers and executives, having too much opportunity to act unethically, and pressure to make profit. On a societal level, the biggest factor is the constant push to be successful, which can lead to people acting unethically to achieve that success.
The aim of this paper is to provide the framework of the current professional accounting code of ethics. What are the ethics and how we define them? In this report we try to determine the main ethical principles that will establish the right and
Ethics in the Workplace "Ethics are personal and, at the same time, a very public display of your attitudes and beliefs. It is because of ethical beliefs that we humans may act differently in different situations" (University of Phoenix, 2007). Poor ethical choices in the workplace can truly hurt people. Poor ethics can damage their career, happiness, and quality of life. Not only can these actions hurt the individual who has made the bad choices, but also most often it hurts the innocent.
Accounting fraud refers to fraud that is committed by a company by maintaining false information about the sales and income in the company books, when overstating the company's assets or profits, when a company is actually undergoing a loss. These fraudulent records are then used to seek investment in the company's bond or security issues. By showing these false entries, the company attempts to apply fraudulent loan applications as a final attempt to save the company by obtaining more money from bankruptcy. Accounting frauds is actually done to hide the company’s actual financial issues.