Ethics and Accountant Role in Business Organization

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Ethics is a field in philosophy that deals with concepts of morality such as virtue, vice, fairness, crime, right and wrong. It entails people’s perceptions of what is good or bad. Ethics is mostly used in decision-making and companies should always ensure that their business operations are handled ethically (Duska, Shay, and Anne 2011).

The role of accountants is critical in business organizations. They perform fiscal functions associated with the collection, recording, evaluation, and presentation of financial documents. Accountants also analyze financial data in an organization and the findings are used in decision-making. They decide what type of goods the organization should purchase and give advice on issues such as economic commitments and trends in expenses and revenue. Accountants prepare financial documents, which are used in the expansion, execution, and operation of the Organization’s software systems. They ensure that all deadlines in financial reporting are met both within and outside the organization. They work with financial experts from different sectors of the organization including government officials (Finn, Chonko, and Hung 2008). Understanding and maintaining ethics is critical in the accounting field. The ethical standards are based on dedication to loyalty, impartiality, confidentiality, and objectivity


Every occupation needs special knowledge and abilities and each expert is expected to have specific personal qualities to excel in his career. Accounting ethics is a branch of applied ethics and entails the study of ethical values and judgments about accountancy. Accounting ethics were initiated by Luca Pacioli after which the government, business organizations, and private companies have played a key role in its expansion. In the United States, they were established by the American Institute of CPAs to protect the business industry. Violation of the code of ethics may make an accountant subject to legal action (Duska, Shay, and Anne 2011).

A certified code of ethics is essential in business organizations and the organization should not leave moral decisions up to accountant discretion. An accountant who adheres to the organization’s code of ethics is seen as an asset to the organization. Adherence to an organization’s code of ethics is advantageous since it helps the organization in achieving its objectives.

Business entities greatly rely on accounting ethics. It is difficult for shareholders, creditors, and directors of an organization to trust the financial practices of their accountants hence the need for accounting ethics. Ethical guidelines in accounting ensure that accountants are open, straightforward, and consistent with organizations’ standards. Additionally, shareholders and credit grantors may be exposed to fraud if accounting ethics and standards of honesty are not maintained (Modarres and Rafiee 2011).

Business organizations develop codes of ethics and standards of honesty that their accountants must follow in their financial activities. Every nation has an accounting board that outlines ethical behaviors involved in accountancy. There is also a law in every country that requires accounting professionals to register with the accounting board to perform financial undertakings (Duska, Shay, and Anne 2011).

Due to the broad array of accounting services and current company collapses, there is a need for ethical standards, which are acceptable in the accounting occupation. To censure criticism and prevent deceptive accounting, several accounting companies and governments have established rules and remedies for improved ethics in the accounting occupation. Ethical behavior is thus vital in the accounting profession since it prevents deceitful activities and helps the company to gain trust from the public (Frank, Ofobike, and Gradisher 2010).

An accountant must remain neutral and loyal to ethical rules when evaluating the financial documents of an organization or an individual. Since accountants often come across ethical dilemmas when executing their duties, they should remain vigilant to minimize the chances of external forces manipulating fiscal documents, which could result in both moral and criminal violations (Modarres and Rafiee 2011).

The desire for public organizations to thrive in the business industry may place unnecessary stress and pressure on accounting professionals when creating cashbooks, balance sheets, and other financial documents. Accountants while preparing these documents should remain true in reporting the assets, liabilities, and proceeds of the company without conceding to the pressures exerted on them by the management or organization officers. Unethical accountants can easily change the organization’s financial statements and maneuver digits to paint wrong pictures of an organization’s success. This may result in temporal prosperity since altered fiscal documents will eventually lead to the collapse of organizations (Ngwakwe and Collins 2011).

An accountant may also encounter the ethical issue of reporting accounting infringements to the Financial Accounting Standards Board (FABS). Though it is the responsibility of the accountant to report such infringements, the dilemma occurs if the report is ramified. Such an accounting scandal could lead to the organization’s decline and dismissal of many employees (Grace and Cohen 2010).

Greed is another ethical issue that faces accountants while executing their duties. The fact that accountants cannot control their desire for money makes it difficult for them to follow ethical principles, especially when preparing fiscal statements. Many accountants keep their eyes on their bank accounts and this is unethical since it might result in account sanctions (Modarres and Rafiee 2011).

The organization’s officers may at times request accountants to exclude certain economic figures from financial documents. It is said that such figures portray a bad picture of the organization to shareholders and the public. Omission of these figures is unethical and the accountant must always remain morally vigilant to evade falling into such tricks. Since the information provided by accountants is crucial in assisting managers, shareholders, and others in making investment decisions, their ethical indecencies can be detrimental to the public. This could result in distrust by society as well as the distraction of effective capital market processes.

While describing deceptive accounting, Hunt states, “Every Company in the country is fiddling its profits. Every set of published accounts is based on books, which have been gently cooked or completely roasted. The figures that are fed twice a year to the investing public have all been changed to protect the guilty. It is the biggest con trick since the Trojan horse… This deception is all in perfectly good taste. It is legitimate. It is creative accounting” (Kevin, et al. 2011).

In the accounting profession, ethics is important not only to the accountant himself but also to associates who rely on his services. Accountants need to possess certain qualities to be successful while performing their roles in the business organization. They have an obligation to the companies they serve, their occupation, society, and themselves to uphold high levels of ethical behavior. They must be competent and maintain privacy, integrity, and neutrality (Grace and Cohen 2010).

The public places high expectations on accountants and due to this, accountants have adopted ethical codes in their profession. These ethical codes require that accountants uphold a level of self-control that surpasses the requirements of rules and regulations. Accountants need to follow certain guidelines while carrying out their job. They need to hold to accounting ethics, which have become a rule in contemporary society. Persons receiving the services of an accountant not only depend on their talent and capacity but also their occupational integrity. They rely on the accountant’s integrity to make financial verdicts. According to Hunt, “When people need a doctor or a lawyer, they seek someone whom they can trust to do a good job-not for himself but them. They have to trust him since they cannot appraise the quality of his product. To trust him, they must believe that he is competent and that his primary motive is to help them” (Kevin, et al. 2011).

Ethics is essential in accounting especially at a time like now when the world is going through an unstable economy. Research shows that accounting professionals should adhere to accounting standards to succeed in their duties. Many countries have differing views when it comes to the enforcement of accounting ethics. For instance, in Germany, accounting ethics are governed by “tax law” while in the United States, these are governed by “Company Law.” Nations also have unions, which regulate accounting. In Sweden, accounting is controlled by Accounting Standards Board (ABS) while in America; this is done by the Financial Accounting Standards Board (FASB) (Finn, Chonko and Hung 2008)

The nature of work performed by accountants calls for ethics of a high degree. Users of financial documents such as shareholders and potential stakeholders rely on a company’s annual financial documents since they can use the information to make investment decisions. They rely on the opinion of the accountant who is involved in the preparation of the documents as well, as their verification. An organization needs to teach its accountants how to adhere to accounting ethics. The accountants should identify accounting issues that have moral implications and develop a sense of ethical responsibility. They should learn how to deal with ethical dilemmas and the uncertainties involved in the accounting occupation. Finally, accountants should understand and value the history and composition of accounting ethics hence setting a stage for moral behavior.

To maintain strong ethics, an accountant “must have a strong sense of values, the ability to reflect on a situation to determine the ethical implications, and a commitment to the well-being of others” (Duska, Shay and Anne 2011). The accountant must realize that an ethical issue has occurred, recognize the parties that are likely to be involved in the outcome of the ethical dilemma, determine other options assess the outcome of each option on the interested parties, and finally choose the best option.

While performing their duties, accountants should consider public concerns. They must know how to apply accounting ethics even when faced with dilemmas that could lead the company to a loss or even discontinuation.

Due to various accounting outrages, critics in accounting state, “when asked by a client “what does two plus two equal?” the accountant is likely to respond, “what would you like it to be?” (Frank, Ofobike and Gradisher 2010). This together with other criticisms of the occupation’s issues, has led to improved standards of professionalism while accentuating ethics in the workplace. Accountants should accept their duties to society. The AICPA Code of Professional Conduct describes the accounting occupation as comprising of customers, credit grantors, managers, governments, shareholders, the company, and financial society. Accountants who in most cases are employees of business organizations should be mindful of their responsibilities to society as professionals. They should only perform duties that they can complete with competency and must undertake these tasks with sufficient care and attentiveness (Finn, Chonko, and Hung 2008)

Accounting ethics require that private information that is only known to accounting experts should not be disclosed to strangers. The only significant exception to the privacy rules is that accountants’ work documents are subject to scrutiny by the court. Accountants need to be independent in that they should be unbiased and objective to avoid actual and perceptible conflicts of interest. For instance, an accountant should be fair while dealing with clients who are related to him financially or by blood.

Integrity and moral qualities are important in accounting. This view supports the strain placed on honesty as a vital personality of accounting professionals. The Standards of Ethical Conduct for Management Accountants (SECM) printed by the National Association of Accountants (NAA) states that financial accountants have a basic responsibility to the companies they serve and to the maintenance of high-level ethical behavior. SECM identifies four basic elements of accounting ethics, which include integrity, privacy, impartiality, and competence. Accountants have very high chances of engaging in immoral activities and this has led to profound implications in companies (Boland and Sugahara 2011).

Accountants need to be honest when carrying out their duties and especially when dealing with accounts and monetary matters. It is, however, debatable whether the accountant’s honesty belongs to the individual or company for whom he is acting as an intermediary or to the public sector in terms of the government or the good of the society. When conflicts occur between customers, the accountant must decide on what is right (Earley and Kelly 2011).

In accounting, the customer places his trust in the accountant. The accountant knows and understands all the rules and regulations involved in accounting and therefore the customer fully relies on him. Accountants must have good ethics since customers often give them confidential information such as personal identification numbers (PIN) which if disclosed, the customer might suffer from identity theft. Accountants must therefore practice good ethics to avoid legal repercussions from customers. Accountants should not go against the laws and regulations governing their work.

The outcomes of ethical conduct in accounting are broad in the economy. Every business organization has an accountant who provides information in the organization. Aggressive accounting has, however, become common in organizations since many accountants are tempted to change fiscal documents. They employ dubious accounting techniques to boost financial results. They may even enter revenues and expenditures inaccurately or even leave out expenses (Earley and Kelly 2011).

Accountants should be cautious when agreeing to gratuities from external parties such as merchants and customers. Since many organizations lack the mandate that accountants sign conflict of concern, which hinders the capability to accept even minor gratuities, then accountants should politely reject any gratuity. Accounting ethics help companies in safeguarding their commercial practices and maintaining the self-confidence of their clients. Ethical guidelines thus act as a long-term strategy in increasing public confidence in a business organization (Boland and Sugahara 2011).


Accountants should be educated on the ethics involved in accounting before becoming employees in any organization. Business organizations should assist ethical educators since this enhances the integrity of accounting as a profession. To help reduce ethical dilemmas such as aggressive accounting, organizations need to hire accountants who have completed educational courses on ethics. Business organizations should develop whistleblower hotlines to motivate their accountants in demonstrating openness and integrity when preparing financial documents. Small business directors and investors should learn the fundamentals of accounting ethics to circumvent legal and economic troubles. Accountants should report financial information in the clearest and most precise manner with the anticipation that the information presented comprises an independent report of the organization’s financial position.


In accounting, ethical standards are based on dedication to loyalty, impartiality, confidentiality, and objectivity. Opinions on the qualities of accountants show that they should be ethical and have honesty. Understanding and maintaining ethics is thus critical in the accounting field. If accounting ethics are not upheld, then small business directors and investors, who rely on moral gathering and reporting of financial data are put at risk. Accounting ethics require not just adherence to occupational rules but also the realization of possibilities for harm. This involves the use of logic and judgment and the exhibition of moral integrity and inspiration to resolve moral disputes.


Boland, G. and Sugahara, S. 2011. Faculties’ Perceptions of Ethics in the Accounting Curriculum: A Japanese Study, Research on Professional Responsibility and Ethics in Accounting, [e-journal] Vol. 15, Web.

Duska, R., Shay, B. and Anne, J., 2011. Accounting Ethics. UK: John Wiley & Sons Earley, E. C. and Kelly, P. T. 2011, Ethical Leaders in Accounting, Advances in Accounting Education. [e-journal] Vol. 12.

Finn, D. W., Chonko L. B. and Hung, S. D., 2008, ‘Ethical Problems in Public Accounting: The View From the Top’, Journal of Business Ethics (Netherlands), 7(8), 605-615

Frank, G., Ofobike, E. and Gradisher, S. 2010, Teaching Business Ethics: A Quandary for Accounting Educators, Journal of Education for Business, [e-journal] Vol. 85 Issue 3, p132-138, 7p.

Grace, D. and Cohen, S., 2010. Business Ethics. 4th ed. South Melbourne: Oxford Press.

Kevin, B., Michael, M., Shawn, M. and Teresa, W. 2011, Ethics Education in Accounting Curricula: Does it Influence Recruiters’ Hiring Decisions of Entry-Level Accountants?, Journal of Education for Business, [e-journal] Vol. 85 Issue 1, p1-6, 6p.

Modarres, A. and Rafiee, A. 2011, Influencing factors on the ethical decision making of Iranian accountants, Social Responsibility Journal, [e-journal] Vol. 7 Issue 1.

Ngwakwe and Collins, C. 2011, International Journal of Sustainable Development & World Ecology [e-journal] Vol. 18 Issue 5, p442-452, 11p.

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