Meaning Of Ethics In Accounting
Ethnics in its broader term deals with human conduct in relation to what is morally good and bad, right and wrong. It is applicable to values for decision making. These values include honesty, fairness, responsibilities, respect and compassion.
Accounting ethnics in the field of accounting refers to the guidelines (consisting of judgment and moral values) that a professional needs to follow while practicing accounting. Accounting ethnics can also be defined as a set of distinct guidelines for a business to maintain a clean balance sheet; accounting for profit, expenses and losses incurred and prevent it from mishandling financial reports and statements. For an accountant, it is very important to understand the rules and regulations of his position in an organization. Any deviation from the moral code of conduct or abuse accounting ethnics can result in dire consequences for him, such as suspension of license, termination of right to practice, and hard penalties
QUALITIES OF ACCOUNTING ETHNICS
An accountant is the person that is responsible for the collection, recording, analyzing and interpreting financial information etc. An accountant is a practitioner of accounting which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others to make decisions about allocating resources. Therefore, a good accountant must possess the following qualities:
An accountant must be a truthful, sincere and straightforward person that the public can depend on.
A professional accountant should be straightforward and honest in all his/her professional and business relationships. His yes should be yes and no should be no at all times.
This involves making company records readily available to stakeholders such as investors and employees. This practice helps to demonstrate to these interested parties that the company has nothing to hide
A professional accountant should not allow bias, conflict of interest or undue influence of others to override professional or business judgment.
PROFESSIONAL COMPETENCE AND DUE CARE:
A professional accountant has a continuing duty to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques. A professional accountant should act diligently and in accordance with applicable technical and professional standards when providing professional services.
A professional accountant should respect the confidentiality of information acquired as a result of business relationships and should not disclose any of such information to third parties without proper and specific authority unless there is a legal or professional right or duty to disclose. Confidential information acquired as a result professional and business relationship should not be used for the personal advantage of the professional accountant or third parties.
A professional accountant should comply with relevant laws and regulations and should also avoid any action that discredits the profession.
BENEFITS OF ACCOUNTING ETHNICS TO:
- It brings confidence to the noble profession.
- It is a guideline for accountants to follow.
- It assists an accountant in charging remuneration.
- It protects the society from prominent scandals example in companies.
- The public expects companies to present fact-based and accurate accounting of business activities.
- Society places higher expectations on professionalism.