ACCOUNTING AND ETHICS

Accounting and Ethics

Abstract

Failure in business ethics is a real threat to the future of every corporation. business ethics as an issue is a hundred times more powerful than the internet or globalisation and can destroy your business in a week. To make matters worse, standards of business ethics are changing rapidly in response to random events which capture public imagination. In business ethics, what was good is becoming bad and what was considered bad is now good. Standards for business ethics that have worked for decades are looking old fashioned or immoral while other practices that raised questions are becoming totally acceptable. So what is going to happen next in business ethics? How can corporations use business ethics to restore confidence and protect themselves against tomorrow's headlines? What will be the new "Gold Standard" for business ethics and corporate governance? How much further than legal minimum requirements for business ethics should corporations go to ensure sustainable success?

Table of content

ABSTRACT2

INTRODUCTION4

ANALYSIS5

CONCLUSION9

REFERENCES12

Accounting and Ethics

Introduction

In today's fast paced world, Ethics have emerged as an integral part of every system. With the growing number of organizations worldwide and fierce competition, every firm wants a larger share of the pie. It is just a matter of time before businesses collapse and financial markets stumble on a worldwide scale. In order to avoid such a catastrophe, today's accountants have been given more challenges to face and higher roles to play within their organizations. Managerial and financial accountants are required to operate with highest ethical standards. (Jenson 2002)

Corporations will be expected in future to "build a better future" - not only for their shareholders but also for their customers, workers, business partners, community, nation and the wider world. Those with effective business ethics based on this core value will have an added competitive advantage: attracting and retaining talent and generating positive reactions in the marketplace., (Banis 2000)

Analysis

The accounting profession is regulated by professional associations and not the government. These associations include the AICPA, the Institute of Management Accountants (IMA), and the Institute of Internal Auditors (IAA). Each of these organizations has internal means to enforce the code of ethics. To practice accounting, members must obtain a license from their state. Most states require enforcement of the AICPA code. Violations of the code of ethics can lead to loss of license, expulsion and recommendation for investigation. Investigation can lead to more adverse consequences because of state and federal laws (Bookrags, 2006).

Members of AICPA who perform audits of public corporations are subject to federal securities laws and regulations, including the Securities Exchange Act of 1934. These laws are administered and monitored by the Securities and Exchange Commission (SEC). The SEC regulates companies that are publicly traded. The SEC requires publicly traded companies to have their financial statements audited by an independent CPA. The SEC establishes and enforces the auditing standards and procedures for this purpose (Bookrags, 2006).

Certain code violations will lead to civil accountant liabilities, while some can lead to criminal accountant ...