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Essay On Accounting Ethics

Ethics In Accounting Essay

Ethics commonly refer to the rules or principles that govern what is considered 'right' and 'wrong' in regard to ones conduct. However, in the corporate businesses world ethics in accounting seems to be an after thought. With the highly publicized accounting scandals of WorldCom, Enron, and Tyco many business have adopted new policies, procedures along with internal controls to reduce the risk of litigation.

In 2002 the government stepped in and created the Sarbanes-Oxley Act. The Sarbanes-Oxley Act was created to protect investors from corporate accounting fraud. The Sarbanes Oxley Act has helped to regulate an organization's financial information by covering issues such as establishing a public company accounting oversight board, auditor independence, and corporate responsibility and enhanced financial disclosure. It was designed to review the dated legislative audit requirements, and is considered one of the most significant changes to United States securities laws since the New Deal in the 1930s. The ACT gives additional powers and responsibilities to the U.S. Securities and Exchange Commission. The Act changed accounting practices in regards to the requirement on reporting, and disclosures. The ACT also offered protection to corporate executives who retaliate against the whistleblowers who provided information in an investigation. Corporate executives who retaliate against the whistleblowers may be faced with up to 10 years in prison.

Vice president Jared Bowen believed he was covered under the Whistleblowers Act when he provided information to Wal-Mart that aided a probe into Vice Chairman Thomas Coughlin. The probe found that Thomas Coughlin received as much as "$500,000 in unauthorized payments that seemed to have...

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Accounting Ethics Essay

Accounting is a form of activity that intends to provide an inventory of a product or a system that contains numerical figures. Basically, accounting concentrates on numbers that are indicated from financial reports made by the operating organization. The purpose of using accounting practices is to determine the correct and accurate way of computing a certain numerical figure that represents the value of a product or a facility. In this case, the margin of committing errors when computing for numerical values are slim because there is a person responsible for handling financial transactions for the company. They are the accountants who are licensed to operate as financial advisors to the company that performs auditing and formulating financially related values of the company’s assets and liabilities.

Accounting ethics is important because it deals with the principle of veracity. All details submitted by the accountants with regard to the financial reports of the company are stated in truth. This is in accordance with the statement of agreement that has been done between the accountant and the company to ensure that all information is correct and accurate with the financial reports and transaction histories. Creating financial reports are carefully drafted before finalizing the details because it needs a regular scrutiny with regard to the amount of assets and liabilities that were transacted by the company. This includes the value of a commodity that has been transacted by the company as well as the services that were included with the transactional activities. Reports of financial assets and liabilities are usually checked before confirming by the auditors is critical to prevent any conflicting of information that is indicated from the financial reports.

The value of ethics in accounting practices generates a significant structure of involving the company to become functional and reliable. Accountants need to know the mechanics of computing assets and liabilities so that all details are correctly indicated from the financial reports. Financial reports are usually forwarded on a monthly basis so that the company can monitor any progress with its marketing strategies as well as management of its transactions. The value represents the company’s policies and activities to ensure that there are no discrepancies with the financial reporting system. Accounting ethics applies to every accountant by requiring them to undergo a licensure examination after their academic years. This is to allow accountants to be officially recognized as part of the national accounting society who are licensed after passing the board exam.

Accountants play a major role in influencing proper standards of ethical values to comply with the regulating agencies against inconsistent reporting of finances. Having a team of licensed accountants values the degree of the company’s rightful way of presenting their financial reports to the public and accounting regulating firms. This is to ensure that the company is always open to allow the public about its presentation of assets on a monthly basis. Consumers can monitor the progress of the company’s asset management structure to determine if they are still competitive in the market. Transparency is an important value applied by the accounting ethics because it displays the truth about the company’s market value and interests over time. In this position, the value of accounting practices ensures that the company always improves its interest as well as virtues to improve its computational practices with the company in an accurate way (Ehrlich, 2016).

    Reference
  • Ehrlich, Paul R. (2016), Conference on population, environment, ethics: where we stand now (video, 93 min), University of Lausanne.