Introduction
The finance department is usually the most critical in any organization. Accountants are one of the major stakeholders in the finance department. They are usually endowed with the responsibility of recording and analysing all the financial transactions in an organization. Usually this includes all the financial transactions in all the other departments within an organization such as marketing and operations departments among others. (Brooks and Dunn, 2010)
It is quite imperative to note that accountant profession stipulates that all accountants adhere to the code of ethics in their line of duty. This is put in place by diverse bodies such as the Institute of Management Accountants. Failure to adhere to this is normally a crime that has its repercussions of breaching the expected code of conduct. This paper therefore outlines the code of ethics for accountants (Cooper, 2007).
Confidentiality
According to various accountancy bodies such as International Federation of Accountants (IFAC), confidentiality needs to be upheld. It is normally expected that accountants should not disclose such information to any outsiders. This is more so to people who have no legal right to know such confidential financial information of an organization. (Gaa and Thorne, 2004)
Some of this confidential information may relate to an organization’s current financial status or profitability. This also includes giving information about an organization’s debts and confidential information concerning clients. This should be adhered to even in situations where an employment contract between an accountant and client organization ends. The code of ethics in this case also stipulates that accountants should not use such confidential information for their personal gain. For instance revealing bankruptcy information of clients to competitors for financial rewards is breaching the aspect of confidentiality. (Brooks and Dunn, 2010)
It is also vital that accountants refrain from disclosing such information to close family members and even employees who have no legal right to know such information. Such information can only be disclosed where there is a legal requirement. However, in this case, consideration should be carried out to ensure that all stakeholders’ rights are not infringed. (Gaa and Thorne, 2004)
Integrity
Integrity is one of the common codes of ethics that is adhered by different professionals. The accountants’ code of ethics also stipulates that accountants should uphold high levels of integrity. Accountants are usually expected be honest about information pertaining to a Company or even clients. For instance, they need to give the correct and accurate costs incurred by an organization within a financial year without adjusting the figures. This also includes the costs incurred at departmental levels. (Gaa and Thorne, 2004)
Integrity in this case calls for honesty in handling financial figures. They should not adjust the figures for their personal gain. It is expected that accurate figures be recorded in the financial records of the Company. This in essence requires high professionalism on the part of accountants. The code of ethics pertaining to integrity requires a hundred percent truthfulness when handling financial matters whether of external or internal stakeholders. All business deals with clients need to be carried out with a lot of fairness. (Cooper, 2007)
In this case, accountants should not exploit clients who may not be knowledgeable on business and financial matters. Business relationships handled by accountants should be done without any form of favoritism. Accountants should not fail to give essential information in any reports that could result in deceptive perception. It is also wrong for accountants to modify any financial report in a manner that is not the real case on the ground.
Professionalism
Accountants are usually trained on rules and regulations that they have to adhere to in their line of duty. Some of these may differ from one nation to another. The code of ethics requires that accountants strictly adhere to the laid down structure on how to carry out their duties. This can be termed as adhering to professionalism. (Cooper, 2007)
There are also laws that govern accountancy work. These also need to be followed to the latter by accountants. This should be carried out to avoid any discrediting of the accounting profession by clients or third parties. This in essence can result in overall negative reputation of the accounting profession. (Gaa and Thorne, 2004)
For instance, accountants should not exaggerate on the services that they will provide to the client while knowing that whatever they are promising is unachievable. This includes giving false information concerning their qualifications just to market services. For instance, one should not claim to be a certified public accountant when he is not. This also includes exaggerating their accounting experience so as to have personal gains. Disparaging comparisons on other accountants work should be totally avoided. (Brooks and Dunn, 2010)
Impartiality
It is expected that accountants be extremely objective when carrying out their duties. In this case, accountants’ professional judgment should not be influenced by bias in any way. For instance, if an organization needs to procure materials, priority should not be given to a Company just because of friendship with the accountant. This also includes making financial decisions within an organization where the accountant’s point of view is required. Aspects of conflict of interest in line of duty should be avoided altogether. Unjustifiable influence on decision making within an organization should not occur.
Due care and competence
According to the accountants’ code of ethics, it is expected that accountants maintain the required skills in their line of duty. This is such that clients get continuous professional service. This means that even after acquiring the relevant qualifications, accountants have to ensure that they maintain quality services. (Gaa and Thorne, 2004)
It should not occur that an accountant starts providing quality services and after having a large customer base, he starts being unprofessional without caring for the clients. It is also expected that high diligence be adhered to when accountants provide required services. (Cooper, 2007)
In this case, the services should be in accordance to laid down professional accountancy standards. This also means that accountants have to provide services within the time span agreed with the client without unnecessary delays. This is more so without alerting clients of possible delays. It also requires that the accountant carries out the assignment after a thorough analysis of the client’s requirements. This is to ensure that entire client requirements are implemented efficiently and effectively. (Gaa and Thorne, 2004)
The code of ethics in this case also stipulates that accountants have sound judgment when providing services to clients. This also includes adhering to overall professional competence in the accountancy field. It is therefore not just a requirement for accountants to attain professional competence but also to maintain it throughout their service delivery. This calls for a thorough understanding of business and professional development in the accounting field. It means that effort should be geared towards continuous professional development in line with the profession such as to deliver competent and professional services. (Cooper, 2007)
Conclusion
In conclusion, accountants play an integral role in the overall success of organizations. They are usually endowed with the responsibility of recording and analysing all the financial transactions within the organization. Accountants are mostly expected to adhere to the code of ethics in their service delivery. This includes maintaining high levels of confidentiality.
In this case, information should not be disclosed to any person who has no legal right to know. High integrity also needs to be adhered to by accountants. This entails being honest and fair in their service delivery. Code of ethics requirements for accountants also entails objectivity in their line of duty. This is such that all decisions are carried out without any form of bias. Due care and professionalism is also part and parcel of accountants’ code of ethics.
References
Brooks, J. and Dunn, P. (2010): Business and Professional Ethics for Directors, Directors, Executives & Accountants, 5th ed; Mason, OH; South-Western Publishing.
Cooper, J. et al. (2007): Professional accounting bodies’ perceptions of ethical issues, causes of ethical failure and ethics education; Managerial Auditing Journal; Vol. 22 Iss: 9, pp. 928 – 944.
Gaa J. and Thorne. L. (2004): An Introduction to the Special Issue on Professionalism and Ethics in Accounting Education; Issues in Accounting Education (Vol. 19, No.1) 1-6.