Importance of Ethics in Accounting - 1065 Words

Running head: IMPORTANCE OF ETHICS IN ACCOUNTING Importance of Ethics in Accounting Everest University Importance of Ethics in Accounting Accounting fraud is common but is not as trivial as the common cold; a typical organization loses annual revenues of nearly 5 percent to fraud. In addition, almost one-quarter of reported fraud is exceeding $1 million dollars. The accounting industry is constantly growing and changing. Consequently, difficult decisions have to be made every day. While accountants follow a simple code of conduct; nevertheless, due to the infamous scandal of Enron, the Sarbanes-Oxley Act of 2002 was constructed to reestablish confidence in the public marketplace. The importance of ethics and integrity are†¦show more content†¦These regulations are mandatory and set the rules that all accounting firms must follow. The Sox Act of 2002 modified the existing laws set by the Securities Exchange Act of 1934, and its purpose was to prevent widespread scandals in accounting from reoccurring. The amended alterations under †Title VIII of the act (Corporate and Criminal Fraud Accountability) increased penalties to $5,000,000 in fines and/or up to 20 years imprisonment for altering, destroying, mutilating, concealing, falsifying records, documents or tangible objects with the intent to obstruct, impede or influence a legal investigation† (Addison-Hewitt, amp; B2B, 2003a). Also within this area it â€Å"imposes penalties of fines and/or imprisonment up to 10 years on any accountant who knowingly and willfully violates the requirements of maintenance of all audit or review papers for a period of 5 years† (Addison-Hewitt, amp ; B2B, 2003b). Before the scandal of Enron, companies found practicing illegal accounting without serious consequences had little to no effect on moral behavior. While the laws and regulations are clearly spelled out; those caught violating these laws will lose their license or certificate to practice, and any ethical violations will be referred to the appropriate law enforcement agencies while the serious violationsShow MoreRelatedThe Importance Of Accounting As Well As Ethics1442 Words   |  6 Pagesbusiness owners that I come in contact with almost daily from working at a golf course. I asked them all a wide variety of questions both through interviews as well as surveys (see appendices.) I asked them numerous questions both relating to accounting as well as ethics in the business world. They all game me a large range of answers to the majority of the questions that I asked them, however they all had two things that were common answers. First off they all have very favorable views of accountants.Read MoreImportance Of Ethics On Accounting And Business At Large2556 Words   |  11 PagesThe Importance of Ethics in Accounting Zachary J. Blake ACCT 302--B01 LUO 06OCT14 â€Æ' The Importance of Ethics in Accounting Abstract: Ethics are of the utmost concern within accounting and business at large. Ethics are the standard by which we make moral choices and decisions in our lives. In business and accounting, ethics give external users such as stakeholders, venture capitalists, and others a measure by which they can weigh financial statements and information to see if they are accuratelyRead MoreEssay Ethics Article Review886 Words   |  4 PagesEthics Article Review Ethics Article Review The topic of ethics usually revolves around business practices. Included in these businesses practices are accounting and financial decision-making. Both of these require high standards of ethics as many people rely on the information produced by them. The lack of ethics results in misinformation and the lack of trust. This paper will first provide a brief summary of an article that discusses ethics in accounting and financial decision-makingRead Morethe legal ethical and technological conerns paper1087 Words   |  5 Pages The Legal, Ethical, and Technological Concerns Paper For as long as businesses have existed, so has accounting. With time, it has become more complicated and detailed, but it is still a process of keeping financial accounts in order. Through accounting, or financial reporting, a system is set up to keep track of, maintain and audit the financial proceedings. Because accounting and financial reporting of a business is so important for its accuracy and in general, a lot of ethical, technologicalRead MoreEthical Issues Faced by the Accountancy Profession Essay1747 Words   |  7 PagesEthics plays an essential and integral part in the accountancy profession. Professional conduct plays an important role in establishing public trust in financial reporting and business practise. Yet this can and has come under threat when clients and employees are exposed to the risk of fraud when accounting ethics are not adhered to. Codes of ethics are adopted to ensure the reliability, comparability and integrity of financial statements. Ethical standar ds exist to safeguard the fundamental principlesRead MoreWhat Makes A Good Leader?905 Words   |  4 Pagesleadership style as an accounting manager: ethics and trust, and other-centeredness (described by Robbins and Judge as, â€Å"socialized charismatic leadership†) (2011). Authentic Leadership through Ethics and Trust What role do ethics and trust play when we determine the effectiveness of a leader? Robbins and Judge point out that there are some scholars that argue that the picture of effective leadership is only completed when there is consideration of the role of ethics and trust (Robbins andRead MoreCan Ethics Be Taught? Essay examples1615 Words   |  7 PagesWhat are ethics? Ethics are the set beliefs and values of an individual which they apply to circumstances relating to morality. To act in an ‘ethical’ manner, an individual must display integrity by doing what they believe to be right. When working within any professional body, an individual will be subjected to circumstances in which personal ethics will come into play. The Accounting profession is no different as ethical questions arise as part of any working day and can effect how an individualRead MoreEthics And The Auditing Culture : Rethinking The Foundation Of Accounting And Auditing974 Words   |  4 PagesThe article reviewed was Ethics and the Auditing Culture: Rethinking the Foundation of Accounting and Auditing. The key of the abstract is to demonstrate how traditional ethical settings led to unethical behavior and financial scandals of Enron, WorldCom, and Arthur Anderson (p. 271). The authors emphasize the role of the AICPA Code of Conduct and ethical perspectives for accountants and auditors. Introduction. The authors study profiles of firms that included the accounting fraud. The main objectiveRead MoreAristotle’S Philosophy. One Of The Greatest Philosophers,1085 Words   |  5 PagesAristotle, continues to impact our society today. His theories are easily applied to ethical situations in business, and especially in accounting. Philosophy studies ideals of the meaning of life, truth, and knowledges. When in challenging situations ethics influence choices. Ethics are a crucial as we use them daily in all affairs, business and personal. Our ethics direct us to choose the most ethical solutions, even in events there is no one right or wrong answer. In this situation weighing the benefitsRead MoreEthics Code Of Professional Ethics980 Words   |  4 Pagesabstract demonstrates the importance of AICPA’ â€Å"Code of Professional Ethics† and its components, and the influence of management perceptions on firms’ ethical environment (p. 919). Introduction. The authors study business ethics, compliance with ethics code, ethical issues, and ethical behavior of company management. The researchers concern with ethical believes of company employees and executives, and growing number of legal proceedings due to ethical issues. The ethics code help professionals maintaining