Ethical accountability of accountants - Myassignmenthelp.Com

Question: Discuss about the Ethical accountability of accountants. Answer: Introduction Ethics constitute a vital part of any organization and profession as it conveys affinity of an organization or a profession has with moral values. Accounting is a profession that requires extreme precision and hard work as it deals with the financial assets of individuals and organizations. Although following maintaining ethical standards is not obligatory for accountants, it does hold an important place in the profession. The report deals with the ethical aspects of accounting and tries to provide logical and valid argument in favor of the need for ethics in accounting. In addition, the report elaborates on the role and function of accountants and their accountability to any individual or organization. The report tries to justify that accountants do need to be ethical because the profession demands complete transparency. Role of accountants Accountants are entrusted with the task to collect, record, analyze, calculate and check the accuracy of the financial statements and statistics for an organization, an individual or a company. Overall, the accountant has three primary roles to perform that include collection of financial data, entering the data collected and generating report. The data mainly relates to the finances of any company. Apart from collecting financial data, the accountant also has the responsibility to establish and monitor control procedures. The accountant is also responsible for ensuring that all the financial statistics of a company are published within the given time. Accountants also collaborate with financial professionals belonging to the major sectors like management, government accounting, internal auditing and public accounting. They provide financial data to governmental organizations, nonprofits, tax professionals and others. In addition, accountants given financial advice to the company or firm they work for and help those manage and recover from any financial crisis. Hooks and Stewart (2015) hold the view that the role of an accountant has changed with time and it is now more driven towards profit than disseminating information. The growing competition has compelled companies to better their financial records. This has thus resulted in the elevated importance of the role of accountants in producing concrete and sound financial reports for organizations, believes Shuttleworth (2014). According to the author, accounting has acquired a significant role in the functioning of an organization especially post globalization. Accounting professionals have the daunting task to provide authentic information to the public regarding the financial status of both private and government agencies. This requires them to be genuine and honest. They are bound to implement sound moral decision in all the activities they perform related to accounting (Durocher, Gendron and Picard 2015). They are trusted with the unique responsibility to give professional services to clients while presenting an ingenuous and correct estimation of the financial health of a company or an organization to the public. In order to carry out this task, accountants have to consider certain ethical principles that ensure nothing is hidden from the people. Chawla et al. (2015) argue that accounting ethics is essential in understanding the greater role of the accountants in matters of finance. They further point out that ethics in accounting has been marginalized in the study of management further escalating the issues relating to frauds in accounting. Ethics in accounting ensure upholding of public trust and companys reputation. The ethical codes are set by certain organizations that act as watchdogs of public trust invested upon accountants. Integrity, confidentiality, competence, and behavior are some of the parameters that fall under the ethical code of conduct for accountants. Voss (2017), views that ethical values in accounting comprise an important part in the implementation of economic entities. He further adds that these standards of ethics also help in presenting consistent monetary information used by the stakeholders when taking significant decisions. Numerous cases of fraud engulf the world of accounting thus confirming the paramount need for accountants to be ethical. The later section shall shed light on this issue (Theguardian.com 2018). Accountants need to be ethical A look at the financial frauds and scandals of the last few decades expose the pity picture of the ethical standards followed in the accounting profession. McCann, Offoha and Bryant (2015), highlighted the deterred reputation of the accounting profession while drawing upon scandals such that of Enron and others. They stressed on the issue of the coverage of ethics as an important subject for management students. In the recent years, there has been a significant rise in the importance of ethical studies in professional accounting. Students pursuing management and accounting studies have to understand the value of ethics before taking up accounting as a career. According to Bhasin (2016), the absence of strong ethical guidelines and stern laws in accounting profession lead to the breach of moral code of conduct. He however argues that accountants often succumb to the pressure of higher authorities who want them to manipulate data for companys profit. In cases like this, it comes down to the individual who is in charge of the task whether he or she would put the ethical values at stake to save their job. Ethics hence must not only govern how an accounting professional should perform the job, but it also must administer the way organizations function. A company comprises various departments that oversee its daily functions and apply high-level expertise to make sure it is leading the market race. In a pursuit to achieve targets within deadline, the management often resolves to unethical ways by forging data and statistics. The accountants are the ones who assist managers forge figures and analysis so that they can be ahead of their rivals. However, in doing so, accountants break the trust of the public who put faith in the company or organization they work for. In a very recent case of breach in accounting ethics, the US-based firm Deloitte compromised the security of millions of its stakeholders when in 2017; its cyber security was hacked (Fortune.com 2018). This brought forward the firms failure to adhere to the ethical code of conducts that includes confidentiality and professional competence both of which, the company failed to maintain. In the views of Mirshekary and Carr (2015), ethicality in accountants and accounting firms is cannot be induced forcefully as it needs a personal sense of morality. However, some might argue that rather than asking accountants to follow ethics or be ethical, one should ask the firm or organization to implement strong ethical guidelines. It is but also true that accountants face ethical and professional dilemmas in their workplace when they are left with no choice but surrender. The ethical framework formed by the Association of Certified Public Accountants (AICPA) and the Institute of Internal Auditors (IIA) amongst other demand every accountant and accounting firms to comply with the ethical codes. With an understanding of these frameworks, the accounting professionals can make better decisions and help uplift the professions reputation (Mirshekary and Carr 2015). This summarizes that rather than asking whether accountants need to be ethical or not, the question must be framed as un der what circumstances they need to be ethical. Conclusion In the end, it can be stated that accountants must always follow the ethical code of conduct set by the regulatory bodies. However, the circumstances under which they break the ethical codes must also be scrutinized. Accountants are not the antagonists or trust-breakers always, they face dilemmas that are difficult to comprehend. Sterner and stricter rules must be framed for the organizations and companies to follow and even sterner laws against the breach of these rules. The report presented a logical argument in favor of the accountants need to be ethical. The roles performed by the accountants and the companies have been mentioned in the report as well. Further, the report highlighted cases of accounting fraud that furthers the need. References: Bhasin, M.L., 2016. Survey of Creative Accounting Practices: An Empirical Study.Wulfenia Journal KLAGENFURT,23(1), pp.143-162. Chawla, S.K., Khan, Z.U., Jackson, R.E. and Gray, A.W., 2015. Evaluating ethics education for accounting students.Management Accounting Quarterly,16(2), p.16. Durocher, S., Gendron, Y. and Picard, C.F., 2015. Waves of global standardization: Small practitioners' resilience and intra-professional fragmentation within the accounting profession.Auditing: A Journal of Practice Theory,35(1), pp.65-88. Fortune.com 2018.Deloitte Gets Hacked: What We Know So Far. [online] Fortune. Available at: https://fortune.com/2017/09/25/deloitte-hack/ [Accessed 12 Jan. 2018]. Hooks, J. and Stewart, R., 2015. The changing role of accounting: From consumers to shareholders.Critical Perspectives on Accounting,29, pp.86-101. McCann, J.T., Offoha, E. and Bryant, R., 2015. Student Perceptions of Accounting and Business Scandals on the Accounting Profession.British Journal of Economics, Management Trade, pp.326-341. Mirshekary, S. and Carr, R., 2015. Effects of exposure to unethical practices on the personal attitudes of accountants in small accounting firms.Journal of Management Organization,21(1), pp.98-106. Shuttleworth, C.C., 2014. Perspectives of accounting students and teachers on the changing role of management accountants in organisations.Southern African Business Review,18(2), pp.140-162. Theguardian.com 2018.The world's biggest accounting scandals. [online] the Guardian. Available at: https://www.theguardian.com/business/2015/jul/21/the-worlds-biggest-accounting-scandals-toshiba-enron-olympus [Accessed 12 Jan. 2018]. Voss, G., 2017. Certificate of Ethics in Accounting and Professional Independence of Accountants.European Journal of Economics and Business Studies,9(1), pp.212-220.