Accounting Ethics
Ethics is not a new phenomenon in most of the professions. Accounting embraces the various ethical standards in dealing with daily problems. One of the most common challenges in the field of accounting is a conflict of interests, where accountants have to choose between their profession and other issues. The code of ethics associated with accounting, however, provides solutions to the challenges that face the accounting profession. Several topics are covered in accounting, with most of them surrounding the issue of ethics. Accounting is founded on several ethical standards that enable accountants to deal with conflict of interest and other vices without compromising professional standards.
Ethics and Crisis Management
The code of ethics in accounting is strategically developed to ensure consistency in the accounting sector. Accountants are expected to review the code of ethics as frequently as possible to avoid crises and conflicts. Several crises may occur during the accounting practice, and the code of ethics comes in handy to ensure that the accountants are well set to address the crises (Brooks & Dunn, 2012). For example, an accountant may be involved in a case where different departments conflict the expenditure of finances. The accountant needs to abide in the code of ethics while addressing such conflicts to avoid causing bias. Generally, accountants are expected to remain objective and independent while dealing with issues of their firm.
Objectivity and dependence are among the ethical standards that govern thhttps://sharksavewriters.com/ethical-dilemma-in-nursing-homes-regarding-terminally-ill-patients-2/e operation of every accountant. Conflicts of interest are bound to happen throughout the accounting process calling for the application of ethical procedures. Besides, an accountant is supposed to remain free from any potential conflicts of interest as well as unhealthy business relationships that may compromise the decision-making process of the accountant. A firm depends on the opinions provided by the accountant, and thus, having conflicting interests may affect the views made. Generally, accountants are responsible for making financial decisions, and any compromise may severely impact the operation of the firm. Moreover, accountants are expected to maintain due care and competence in daily practice.
The crisis management department relies heavily on the services of the accountants in a firm. Generally, the accountants’ code of ethics prepares them for their roles in the crisis management departments. Besides, the code of ethics requires that accountants prioritize care and competence before making any decision that affects the firm (Duska, Duska & Kury, 2018). Therefore, the crisis management departments utilize the careful and competent nature of accountants to come up with decisions that impact the crises facing the firm. Furthermore, most crises are beyond the control of the firm, and the only viable decisions only ensure that the firm does not face irreversible consequences. For example, some crises may require that the firm uses resources to come up with solutions. The decision to use the firm’s resources should be made carefully to avoid additional consequences. Also, the competence of the accountant is required to ensure that the resources are employed in the right manner to ensure that the firm gets the maximum return from them. Moreover, integrity is essential in the crisis management departments, and accountants are required to show that integrity is part of their professional standards.
Integrity plays a crucial role in the decision-making process. The crisis management departments are founded under the trust that accountants show the highest level of integrity. Generally, integrity ensures that the decisions made by the accountants are aimed at benefitting the firm and not aimed at gaining an individual advantage. Accountants are in a position to impact the decisions made by the firm significantly. For example, the financial requirements of certain crises will be required that the accountants give the go-ahead since most of the department members may lack knowledge of accounting requirements. Also, accountants are sometimes expected to take the auditor roles during the crisis management process, and the firm depends on their integrity. Integrity keeps the accountants from vices, such as receiving bribes and engaging in fraudulent activities. Therefore, the code of ethics aims at producing individuals with integrity, and who can be trusted by the firm with sensitive decisions. Generally, crisis management depends on the code of ethics to benefit from the services of accountants.
Conflict of Interest in Accounting
Most firms have disciplinary bodies that are responsible for the conduct of members in the workplace. One of the most common cases that appear before the disciplinary bodies is that of conflict of interests. Although the code of ethics gives a straightforward solution that the interests of the firm should come before any other interest, individuals struggle to keep their interests outside their workplace. A conflict of interest occurs where objectivity is threatened, and an accountant does not know with certainty the opinion to stand with during the crisis. Generally, the firm expects the accountant to be competent enough to avoid conflicts of interest, but the situation changes at an individual level. Moreover, conflicts of interest occur differently in different fields of practice, and accountants are not limited to the solutions they provide.
Conflicts of interest occur differently depending on the field within which an accountant is practicing. For example, an accountant in a public office will face different conflicts of interest from an accountant in a business setting. The solutions available to an accountant in the public sector will, therefore, be different from the solutions available to the accountant in a business setting. The issue of conflicting interests may come up in the public sector when competing members require the disclosure of certain information (Christensen, Nikolaev & Moerman, 2016). For example, a political aspirant may request for the financial statements of a particular office held by their competitor. Such information may be private and can only be released upon a procedural request and with approval from the official owner. The code of ethics specifies that an accountant should maintain the integrity and should not associate themselves with outside parties for personal gains. Moreover, a conflict of interest may arise where the family of the accountant is involved in a crisis with the firm.
Professionalism is put to the test when family issues come up, and opinion is required from the professional. For example, an accountant’s family may be involved in a struggle with the firm within which the accountant works. Under normal circumstances, the accountant will have challenges choosing between the firm and their family (McCann, Offoha & Bryant, 2015). The code of ethics specifies that the interests of the firm should be prioritized under all circumstances. However, the family cannot be overlooked, and professionalism cannot replace family belonging. The professional way of dealing with such a situation is to allow another professional to handle the case. Although the decision to hire another accountant where the involved accountant is the only professional, a decision has to be made to save the firm and the family from further crises. Moreover, the application of the code of ethics confuses is situations of conflicting interests, and accountants have always found themselves in such dilemmas.
Professionalism is about being in a position to address challenges without causing bias in the solutions provided. The code of ethics tries as much as possible to address the possible challenges in the workplace but causes some confusion in the workplace. For example, the interests of an accountant seem to be overlooked in the solutions provided for conflicting interests. The interests of the firm are prioritized at the expense of the accountants, who are the most crucial players in the success of the firm. Generally, the code of ethics fails to fulfill its intended goals and only provides solutions for straightforward conflicts.
In sum, accounting is founded on several ethical standards that enable accountants to deal with conflict of interest and other vices without compromising professional standards. Generally, the accounting code of ethics prepares accountants for their roles in the crisis management departments. Also, the code of ethics provides solutions to accountants concerning the solutions for various conflicts of interest. However, the application of the code of ethics confuses is situations of conflicting interests, and accountants have always found themselves in such dilemmas. The professionalism of accountants is crucial in helping them to get solutions from the code of ethics.
References
Brooks, L. J., & Dunn, P. (2012). Business & professional ethics for directors, executives & accountants6th ed. Canada: South-Western, Cengage Learning.
Christensen, H. B., Nikolaev, V. V., & Wittenberg‐Moerman, R. (2016). Accounting information in financial contracting: The incomplete contract theory perspective. Journal of Accounting Research, 54(2), 397-435.
Duska, R. F., Duska, B. S., & Kury, K. W. (2018). Accounting ethics. Wiley-Blackwell.
McCann, J. T., Offoha, E., & Bryant, R. (2015). Student Perceptions of Accounting and Business Scandals on the Accounting Profession. British Journal of Economics, Management & Trade, 326-341.