Accounting Ethics And The Professional Accountant Essay

Question:

Do accountants need to be ethical?

Answer:

Introduction

Ethics in accounting is a field which involves applied ethics and business ethics for addressing the study of moral values in the subject of accountancy. It is also considered to set an example for professional ethics. Due to constant changes in the corporate industry and the accounting subjects, recent emphasis is given on the application of ethics in accounting processes such that an ethical standard is maintained. This report includes a general discussion about applied ethics in the accounting field. Furthermore, this report also includes a literature review of five different types of sources that corresponds to the topic of discussion.

Significance of the study

There are two various groups of people will be benefitted from the study made in this report. The first group of people is the accountants who will be responsible for following the literature discussed in this report. The other group of people is the teachers associated in any universities who will be responsible for imparting education to the new students applying for accountancy. Ethical accountancy is also denoted in the business affair done between any two parties. The type of transaction occurs and purpose of business helps in denoting the ethical accounting processes.

Scope of the report

The study made in this report consists of an ethical analysis that must be adopted in case of accountants. This study also emphasizes on the literature reviews from five different sources which includes peer reviewed article, websites, magazine, newspaper, journals. In addition, the various literature sources will be reviewed such that the information from the relevant sources can be obtained.

Review of related literature

According to Yarahmadi and Bohloli (2015), ethics is termed as a combination of moral values which is defined by the utilization of bad or good behaviors. The concept of accounting ethics was first coined after the collapse of Enron in the year 2001. This was responsible for a massive reinstatement of the corporate governorship which led to an impact in the accounting aspects. With respect to the principles of accounting, ethics is included in six different parameters. These are honesty, objectivity, professional qualification, secrecy, professional behavior and standards. These characteristics are required for adopting ethics in accounting. The main focus of businesses is to maximize the profits made. This adopts whichever ways needed for addressing the requirements whether ethical or unethical. There have been reports of large companies on adopting fraudulent actions for increasing profits made.

As stated by Bizfluent (2018), ethical behavior for accountants is required for many different reasons. As an accountant always consist of various information regarding a client, any unethical or fraudulent behavior must not be emphasized. In a similar manner, the accounting industry must remain ethical in their actions. In case of unethical actions, a business can lose their brand value in the market which will lead to less profit acquisition. As the most effective methods for promotions in the accounting firm is through manual spreading, any bad reputation may lead to potential damages to the business. In addition, there can be legal actions to be taken for any unethical actions posted. In addition, for being an ethical accountant, the consideration of the legal codes and a professional behavior is necessary.


As mentioned by Ahinful et al. (2017), the societal expectations are to be met from the accountant or it can pose an impact on the reputation of an accountant. The higher level of services provided by any account implies the increasing complexity of the adoption. Due to such increase in expectations, there are various code of ethics accepted which leads to high efficiency in professional services. However, it is also reported that accountants performs their job by considering the legal actions of their work rather than the moral actions. This is the reason for the rise of unprofessional actions like Enron which is the cause for arising of financial crisis among the accountants as well as the practicing ones about the lack of professionalism.

As suggested by Loeb (2015), unconscious biases are more than sufficient for causing unethical actions rather than deliberate actions taken. This result in fraud actions in the services provided for accounting. This is the main challenges that are being faced by any accountants for considering their ideas of ethics and moral issues in respect to egoism and utilitarianism. A more diverse understanding combined with a principle approach will help in improving the ethical and moral issues faced by the accountants for removing the basic dilemmas provided from considering the framework concepts. This will help in adopting the use of ethical analysis in the accounting services which will then lead to betterment of professional services.

As described by Gong (2017), recognizing the accountancy ethics can lead to various benefits in the professional services. In addition, it may also lead to credibility and confidentiality of information leading to reduction in frauds and promotion of professional image imparted by the accountants. Once the frauds are prevented in the accountancy profession along with upholding of the public interests by protecting their information, the reputation along with the brand image of the accountant will increase in the society. However, it is seen that the accountants do not follow ethics in their services and this is the main cause of considering ethics and morale in the study of accounting.

Conclusion

Thus, it can be concluded from the study made in this report that applied ethics in accounting is necessary for both the betterment of professional services and betterment of society. This report includes a relevant literature review from various sources which identifies the problems associated with the subject. In addition, all these sources also depict the need for ethics and moral structure to be framed in the existing subject of accountancy. The findings also indicate that the professional accountants consider ethics to be a relevant literature in their subject. This is mainly due to the fact that the subject of accountancy requires advanced skills and knowledge and without the presence of moral ethics, accountants will not be able to deem it professional in their services.

References

Ahinful, G.S., Addo, S., Boateng, F.O. and Danquah, J.B., 2017. Accounting Ethics and the Professional Accountant: The Case of Ghana.

Bizfluent. (2018). Why Are Ethics Important in Accounting?. [online] Available at: [Accessed 17 Jan. 2018].

Gong, J.J., 2017. Ethics in Accounting: A Decision-Making Approach.

Grace, D. and Cohen, S., 2015. Business ethics.

Jones, N., 2014. Acctg 596 Ethics in Accounting.

Loeb, S.E., 2015. Active learning: An advantageous yet challenging approach to accounting ethics instruction. Journal of Business Ethics, 127(1), pp.221-230.

Miller, L., 2017. Ethics and Accounting: Understanding Stock Market Impacts Associated with Ethical Violations (Doctoral dissertation).

Yarahmadi, H. and Bohloli, A., 2015. Ethics in Accounting. International Journal of Accounting and Financial Reporting, 5(1), pp.356-360.

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