The Ethical Framework Of Accounting - 897 Words

Businesses, investors, creditors rely on accounting ethics. The accounting profession requires honesty, consistency with industry standards, and compliance with laws and regulations. The ethics increase the responsibility and integrity of accounting professionals, and public trust. The ethical requirements influence the management behavior and decision-making. The financial scandal of Enron and Arthur Anderson demonstrates the failure of fundamental ethical framework, such as off-balance sheet transactions, misrepresentation of financial statements, inaccurate disclosure, manipulations with earnings, etc. The confronted accounting profession and concern for ethics in businesses forced regulators to revise the conceptual framework of accounting processes. This study aims to understand what effect has an ethical framework in accounting. In particular, we examine the influence of ethics on earnings management, financial reporting, and external accounting. Today, the commercial environment reveals the unethical behavior of management and accountants through the manipulation of accounting records to boost the company’s stock price, falsified financial statements to mislead investors, failure of auditors to correct errors and omissions due to client’s pressure and personal material interests. The study is important because it examines the role of ethics in accounting. The research on identified problems is necessary due to vagueness of ethics concepts and its difficulty toShow MoreRelatedA Sound Financial Reporting System, Supported by High Quality Accounting Standards and Backed by a Solid Regulatory, Governance and Ethical Framework, Is a Pre-Requisite for Economic Development.2064 Words   |  9 Pagesâ€Å"A sound financial reporting system, supported by high quality accounting standards and backed by a solid regulatory, governance and ethical framework, is a pre-requisite for economic development†. Accounting has been around since the beginning of civilization and played an important role in the development of cities, trade and the concepts of wealth. Nowadays, business is very complex and therefore there is an increased need for providing accurate and reliable financial information. MoreoverRead MoreThe Effect Of Professional Ethics788 Words   |  4 PagesEthics in U.S. Accounting Businesses, investors, creditors rely on accounting ethics. The accounting profession requires honesty, consistency with industry standards, and compliance with laws and regulations. The ethics increase the responsibility and integrity of accounting professionals, and public trust. Ethical requirements influence the management behavior and decision-making. The financial scandal of Enron and Arthur Anderson demonstrates the failure of fundamental ethical framework such as off-balanceRead MoreEthics and Conceptual Framework Paper1333 Words   |  6 PagesEthics and Conceptual Framework Paper Conceptual Framework There are two major philosophies in accounting consisting of a principles-based system for accounting and a rules-based system for accounting. The following discussion will speak about these two philosophies and will define one as being a best fit for encompassing the role of ethics and the conceptual framework. The conceptual framework was established by the Financial Accounting Standards Board (FASB) and is used to help define the boundariesRead MoreManagement Accounting : Code Of Ethics1588 Words   |  7 Pagesprofessional service organization such as a law firm or an accounting firm, a manufacturing company such as Chrysler, Toyota, Apple or Microsoft, or a retail company such as Walmart or Target. 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The framework is comprised of three parts, which are: social (People), environmental (Planet)Read MoreEthical Issues Faced by the Accountancy Profession Essay1747 Words   |  7 Pagesthreat 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 standards exist to safeguard the fundamental principles of accountancy and recognize threats to these principles so judgement can be made to resolve ethical dilemmas. However an accountant frequently faces ethical iss ues due to their work and not always stays vigilant to the manipulatingRead MoreUnethical Business Practices Of Multinational Companies1512 Words   |  7 PagesWhile the convergence of accounting standards remains a challenge, so has a set of ethical standards. The need for a global set of standards has become paramount over the last decade. Through my extensive review and research of literature, there appears to be an ongoing need for convergence. The study concludes that through cooperative efforts, between governing bodies such as AICPA and IFAC, we are on the right track in terms of acceptability. â€Æ' Global Set of Accounting Standards The need forRead MoreEthics And The Auditing Culture : Rethinking The Foundation Of Accounting And Auditing974 Words   |  4 PagesRethinking 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. 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The abstract 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