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:
HONESTY:
An accountant must be a truthful, sincere and
straightforward person that the public can depend on.
INTEGRITY:
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.
TRANSPARENCY:
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
OBJECTIVITY:
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.
CONFIDENTIALITY:
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.
PROFESSIONAL BEHAVIOR:
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:
THE PROFESSION;
- It brings confidence to the noble profession.
- It is a guideline for accountants to follow.
- It assists an accountant in charging remuneration.
THE SOCIETY;
- 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.