Deterioration of ethics and professionalism amongst accountants
Research has been carried out to try and determine the main reason that professional accountants are failing in their work. For the past few decades, it has been noted that the accountants are barely abiding by the code of conducts. Professional accountants have been unable to maintain their professionalism as well ethical behavior at their place of work. This research paper goes deep in the accounting profession in an attempt to determine the real cause of the deterioration of ethics and professionalism amongst accountants. The study identifies the basic principles of accounting ethics as well as how these principles may be undermined. Accounting profession plays a significant role in any business organization contributing to a huge percentage of its profits. This paper also evaluates the various circumstances that contribute to the worsening of the profession and the actions that have been taken by various organizations.
The study will focus on the following questions. • What are the governing principles of accounting ethics? • What are the main causes of none-ethical behaviors amongst the accountants? • Are there any steps that have been taken to curb the ethical problems discussed? • Were there any successful measures initiated to solve the issue? • Is ethical education in accounting studies of any significance towards solving the ethics issue? • What are some of the personal issues that cause deterioration of ethics and professionalism amongst accountants? • How are professional accountants expected to behave while serving the public? Research significance The accounting department is one of the organizational departments that operate towards building the economic state of the institution. This paper is expected to utilize the accounting departments’ significance by addressing some of the major issues faced by its staff.
According to George Bernard, the co-founder of the London school of economics, the practitioners of accounting have been able to acquire wealth, prestige, and power through the practices of accounting. Power amongst accountants is acquired by recognizing themselves as an entity of knowledge and proficiency and at the same time relinquishing it in form of doses for the benefit of being paid. The accountants have been able to make dependency an intrinsic part of the entire accounting process and making a living. Accounting ethics was also identified as one of the intrinsic parts of the power and mechanics of wealth. Accounting ethics has risen to such a value through the study and practice of judgments together with moral values in the field of applied in relation to how they apply to accountancy.
The stock and shipments in question belong to managing director (majority shareholder) and he has also requested you too present fully detailed reports. The CEO on the other hand has promised you that you he will share with you the benefits of the corrupted transactions. You will also be able to keep your job and you will get a raise in your salary. Key fundamental principles. Integrity- this key principle requires you to abide to honesty regardless of the circumstances that you are faced with at all times. An accountant is likely not to follow the motives of integrity so as to save his career. Therefore, before taking any action the accountant is supposed to gather reliable information of which he or she is sure of.
Information is important because you will be able to counter any allegations posed by any of the individuals involved. Once you are sure of the data you have collected you may now be ready to approach the managing director. Considering the ethical nature of the managing director you may be allowed to reference the code of ethics while explaining the current situation. During the research, I made sure that my voice is reflective enough and also to ensure that it conveys authenticity and self- confidence. Results of the study methodology. Conducting this study required the involvement of different members of the business community, experienced enough to provide relevant data as well as share their own experience within the accounting field. The results were recorded in accordance to all the situations that any professional accountant could find themselves in.
the relevant results showed that most accountants feel that it is not always in their power to decide the nature of their ethical behavior. Laws created by this committee advocated for harsh punishment against accountants involved in fraud which included serving long-term jail terms. It was later observed that these laws were not effective enough in bringing confidentiality within the stock market. They realized that privacy amongst the accountants was only going to be achieved through ethical leadership from the accounting profession, the government, and the business community. The highest sense of integrity is required from all members of the accounting community while performing their professional duties. This is according to Article III in the principles of the AICPA code. , religion, personal observations literature, etc.
, there are those typical values that must be shared by a country. Those values include courage and, respect for other people’s lives as well as the willingness of an individual to give up their interests for a more excellent course. Accountants and the other members of the business society need to be guided by a code conducts that can help build public confidence I the products and services that they offer. Creating ethically healthy relationships amongst the accounting persons will always be difficult if morality deteriorates in the society. An objective viewpoint helps the investment society maintain a reliable source of information that they can rely on, while trying to evaluate financial cash flow, and even the financial position of an enterprise.
Evidentiary mater is required by auditors whenever they try to verify that the information contained in the statements is correct. This presumably is the reason that they expect their clients to produce the required financial documents under the objectivity principle. The viewpoint of the auditor is also another way of viewing the objectivity principle. An auditor may decide not to be objective about the resulting audit report. Maintaining professional knowledge and skill as well as extending those skills to the employer and clients so as to ensure competence and professional services based on the ongoing developments in practice. While providing these professional services, an accountant is expected to act diligently and in accordance with the applicable and professional standards. Attaining professional competence and maintaining it re two different phases that are involved in professional accounting and care.
To maintain professional competence, it requires an individual to understand the relevant technical professional and business expansions. Acting in accordance to the requirements of a particular assignment is what encompasses diligence within a working environment. Confidentiality also applies in the case of the information that has been disclosed to them by a client or their employer. It is an accountant’s duty to ensure that those below him in an organization maintain the same levels of confidentiality. This is achieved by taking the most effective and reasonable steps towards achieving the same. The need for confidentiality should proceed even after the relationship between the accountant and the employer or client has ended. Experience matters a lot in any professional field. Communication skills are required of the accountants so as to consider the type of communication to apply as well as to whom that type of information is being communicated to.
Professional behavior Any action that discredits the accounting profession needs to be avoided at all costs. The relevant accounting laws should be complied with at all times no matter the circumstances. If by any chance a third party happens to lay their hands on the sensitive accounting information of an organization, it can destroy the reputation of this profession. All the accountants worldwide should not disrepute the occupation by issuing exaggerated claims about the services that they can offer. Self-interest threats: There are unlimited circumstances that may contribute to the self-interest threats for a public accountant in public practice. These circumstances include a financial interest whereby an accountant may be jointly holding a financial interest with a client. The accountant may also find himself having a close relationship with a client due to the anticipation of the client providing a potential employment for them.
In addition to potential employment, the accountant may also be concerned about losing the client. Self-review threats: in public practice, an accountant may encounter a significant error during a re-evaluation of their work. For example, there may be a threat to objectivity or confidentiality when a professional accountant happens to serve two clients who are conflicting about the transaction at hand. An accountant at the public service needs to be keen enough to make sure that he takes reasonable steps towards identifying circumstances that may give rise to conflicts of interest. Any threats should be evaluated by the professional accountant before making any acceptance. Any special interests that the client may intent to peruse must be thoroughly assessed so that the relevant safeguards can be implemented.
In addition to identifying this conflict, a professional accountant is obliged to investigating the significance of these threats. He or she is expected to bare the ethical responsibilities expected of them in their position. A professional is always in a better position to influence the well-being of an organization when he or she is placed in a senior position. In this position, he can easily exercise the fundamental principles of accounting ethics and at the same time influence the ones below them to do the same. Duties of a professional accountant are not limited to the accounting matters of the organization. He or she can bear the responsibility of furthering the legitimate goals of the employing firm. It is not an easy task for professional accountants to identify ethical dilemmas due to lack of ethical sensitivity amongst them.
It is of the essence to understand that professional ethics in most cases are underpinned by moral reasoning. The accounting profession extensively relies on the code of ethics although it does not guarantee that the accountants will always abide by the code. On the bases of moral reasoning, there are theories that have been developed. For instance, Kohlberg's theory of cognitive moral reasoning and development is mainly focused on why and how judgments are formulated. These topics have been trying to address some of the daily issues within the field of accounting such as causes of morality and integrity in a working environment. There has been a tremendous decline in joint associations of employers, and through this, their employees are continuously experiencing some of the negative implications of these declines brought about by lack of ethical responsibility.
Failure in offering effective, ethical approaches have prompted different learning institutions to jointly team up in coming up with as many educational programs as possible to educate members of the public on the benefits of ensuring continuity of core values such as the morality of employees, honesty and their steadfast adherence. Ethics education. Ethics education in the universities does not appear to have been given the privilege it warrants. Therefore, an understanding of the factors that are associated with high moral development is of crucial importance. Reliable sources have revealed that including ethical studies within the accounting curriculum can influence the professional attitudes of the students. (Clikeman and Henning, 2000). The only question that was left unanswered was whether these concepts of ethics were going to be always beneficial to the students even in their future careers and what extent.
Deterioration of ethics amongst the accountants cannot be blamed on the professional accountants alone. People also question the responsibility of these bodies to offer the ongoing professional development activities in ethics education. This indicates that the best way to improve the accounting profession is by having both colleges and professional educators come together to enhance the quality of the profession. The accounting profession has been able to contribute to the collapsing of many renowned organizations worldwide. These are the type of companies that embrace the kind of culture that obscure their actual financial position, including their performance as well. The collapsing of these companies puts the reputation of the entire profession in jeopardy. They opted to seek different opinions from other public accounting firms.
Institutions do not do this only because they need different views but because they think that they will be able to get results that coincide with the interests of the management. The hired auditors, on the other hand, make sure that his determination focuses on being accepted by his clients. Statistics show that a significant percentage of the companies that seek the external audits end up I failure. This is due to the commercial pressure asserted within the process of resolving the issue of financial reporting. Ethics are always viewed as those principles and standards that determine acceptable conduct in a business organization. The acceptability of every activity in the business is mostly ascertained by the customers, competitors in the business, price controllers, interest individuals, organizations and the public.
It is always quite easy to identify unethical business practices within the business or accounting environment just by monitoring the activities of top management, workers, and clients in these places. Regarding this, those industries and business firms which provide jobs to children should have very severe actions taken against them. It is also considered unlawful to use copyrighted materials and processes, and those businesses and accounting firms involved in this vice should face some disciplinary actions such as closure or revocation of their licenses. It is also possible to get buyers and consumers of some of the harmful products such as tobacco and alcohol having that willingness of purchasing such products which can have detrimental effects on their lives. Their desire to purchase such products comes in even though they may know the impact of such products.
Environmental issues such as pollution, destruction of habitats of diverse wildlife species and disorderly urban growth are also some of the negative effects of production which should be given proper attention when dealing with production ethics Sales and marketing ethics in business first came into action in the late 90s as there were very many cases of unethical behaviors by those employees who were involved in the activities of promoting sales and marketing of company’s goods and services. In sales and marketing, some of the vital events include virtues and mindset, of which both those involved in marketing employ. Recommendations According to the numerous numbers of sources that the data obtained, education has come out as the most effective solution to the problem.
This part of an organization has been established as one of the sections that contribute significantly to the economic well-being of any business organization. Therefore the morality of the professional accounts deeply affects the organization depending on the decisions that they make. According to my research, ethics and professionalism amongst accountants cannot be solely on them. Every section of the organization plays a part in ensuring that ethics and professionalism are maintained during the process of keeping the financial documents alongside other professional duties of an accountant. Researchers have been trying to find solutions that could help curb the unethical behavior currently being practiced by accountants. 5840/profethics20031115 Clikeman, P. , & Henning, S. The Socialization of Undergraduate Accounting Students. Issues In Accounting Education, 15(1), 1-17.
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