Accounting Ethics

Introduction

Business ethics is one of the growing concerns of both consumers and business leaders. Aside from the values and principles incorporated in the goals and objectives of the people, the leaders are also seeking the business ethics among their employees and from their other colleagues. The idea of business ethics lies in the corporate culture of an organization being passed by the seniors to their subordinates and so on. The ethics is not only under the roof of the business but also in other institutions like in the hospitals and schools. The concerns about the business ethics incorporated in the actions of the people are expected to reflect in their performance such as providing the services. Ethics also participates in the creation of the report that is under the responsibility of the accountants. In today’s generation, the accountancy profession is place under the ethical responsibilities and practices.

Ethics and Accounting Challenges

Many researchers find it’s difficult to seek the strong relationship of the business ethics in the accounting profession. Firstly, accounting has its own accepted principles that are being applied in the entire organization. The underlying principles or methods lies in the preferable decisions among the leaders in the organization and the might be based on the size or nature of the business’s transactions. The multiple accounting methods exist in most of the companies and can have a great effect in the computation or calculations regarding to the depreciation of the buildings or machineries or compensation of the people. The freedom to choose the best computing methods is legally implemented in the company as long as it meets the results favorable to the businesses.

The organization usually prefers the accounting method that can create a proper image is the second constraint that deals with the issue of bias reports. The reports have different errors or placing the values or amounts close to the real amount, particularly in financial statements. The computation of the value of the assets obviously depreciates, but the amount varies on the years due to some series of changes like in the monetary policy and foreign exchange rates which is not part in the calculation of the depreciation costs. The management tends to discover the actual amount in the time when they decided to dispose the asset. The estimation of the actual amount or the manipulation of the figures is note technically in favor for the entire organization but this is a usual activity that misinterprets by some of the business leaders.

Education and Ethics

Business ethics is viewed to be part of the education and this can be effectively taught in every courses. The business ethics and accounting ethics covers the various issues in the nature of their work and the challenges that can be part of it. In addition, teaching the business and/or accounting ethics can deliberately suggest appropriate methods wherein the student can achieve the best result in assessing the different accounting transactions and applying the best method. The accounting profession in all over the world is viewed as the one of the most challenging work, and the ethical practice is sometimes misplaced or misused by most of the accountants. To maximize the impact of the ethics in accounting, there should have a link between the principles or core values of the accounting profession to the hands-on training among the students. Most of all, exposing the students in the true nature of business is one of the best educations that the schools can give. Accounting ethics in education plays an essential part in the preparation of the future accountants in different situations arising in the workplace. Furthermore, the education can affect the decision making of the accountants and as well as the leaders that may fall in the different levels of organizational commitment to achieve the corporate goals.

Conclusion

The greatest risk and possible challenge in the practice and credibility of the accounting profession is the manipulation of data. Through the proper timing of the transactions, the data were changes. The choice of the computation method is always on favor of the company bidding the increase of their revenue. The strategies applied in accounting are divided into sides of the ethical issues. On the ethical view, the company has its own right to apply what they prefer is capable in their business and therefore, they did not take any actions to break the law. On the other hand, the unethical view is on the rules they applied that commonly overstated or inaccurately reported the financial stability of the business.

References:

Chong, S., 2006. The Ethics of Creative Accounting Does It All Add Up? – Creativity, Principles, and Accuracy, Insight Business [Online] Available at: http://www.usc.edu/org/InsightBusiness/340articles/fall2006/accounting.html [Accessed 24 Feb 2010].

Hull, A., Wright, M., & Ennew, 2000. Professional Ethics and Accountancy Training [Online] Available at: http://www.icaew.co.uk/index.cfm?route=118516 [Accessed 24 Feb 2010].