Are Ethics important for accounting? There are a lot of view on important of ethics in accounting. Why I choose this topic as my assignment? As accounting student, this issue is really important for my future carrier and as a guideline for me and other people out there that want to be accountant. Hopefully we become a fair and honest accountant and not a corrupt person, Amin.
In my previous post, I had share about definition of business ethics, but what is ethics in general meaning? Ethics, also known as moral philosophy, is a branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong conduct. In other words, ethics is a rules and as guideline for us to follow. Robert H. Montgomery had describing ethics in accounting "Accountants and the accountancy profession exist as a means of public service; the distinction which separates a profession from a mere means of livelihood is that the profession is accountable to standards of the public interest, and beyond the compensation paid by clients."
There are some form of unethical behavior in accounting that we SHOULD NOT follow. Firstly is giving a false statement about the expense incurred in business. Giving out flase information of expense purposely is unethical. In accounting profession, the accountant should provide correct information regarding any expense. If the accountant fail to provide a true information, its make the financial status of the business become false. This misstatement will affect the profit and loss reports of the business and affect the performance of business in long term.The second is overcolour the business revenue. In accounting practices, all revenue in the business should be reported correctly as it can affect the trustworthy of investor in the company. By showing the correct revenue, it will reflect the true and fairness of the financial position of the company.Third is misuse of business funds. Accountant is a person who can access most of the funds in the organization. Its is unethical to misuse them or using it without approval and authorization. This can lead to the closure of the business and lead to the loss of jobs and investments. This will affect the accountant name and make he or she black listed in the company.
There are some reason why ethics is important in accounting. Firstly is confidentiality. People need to have confidence in accountants and the services they provide. If people have no confident with us because our past mistake, its will be hard for the company to get an investment from the investors and shareholders. As accountant, we play the main role in gaining the confident from the investor to invest in our company.Second is Professional Competence. Ethics in accounting ensure that the accountants maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service. this is exhibited by acting diligently and in accordance with applicable technical and professional standards when providing professional services.
Why it is important for accountant to apply ethics in their work. As we see, there are a lot of reason to follow the ethics. It is not just in accounting, it also important in everyone life. In my conclusion, the main point in ethics is to gain trust from other people. If we make our work honestly, people will feel comfortable with us and its make them to do work or business with us. If we not honest and don't have ethical in working, do you think that people will respect you, feel comfortable with you and trust you? So think carefully before doing something that will ruined your future. I give you some example here, one of the hot issue in business world that happens in 2001, financial accounting scandal, Enron Corporation. The conflict of interest of two roles played by Athur Andersen, as auditor but also as cosultant to Enron. Lack of trustworthy employees also make this multi billions company go down. The issued here is people in this company are corrupted. They may think what they do is right but it is wrong for the other people. People should work in good manner, not for their own benefits. The is no short way to became rich with doing something unethical, unless you find the gold or diamond in the cave. Maybe its your fortune. :) thanks for reading
