Ethics in accounting and finance, which is also known as applied ethics emphasizes on human and business ethics, judgments, moral values and their application in the field of accounting and finance. The accounting ethics revolves around independence, objectivity, integrity, confidentiality, professional competence and professional behavior. Performing the accounting and financial tasks following the ethical standards can help the company succeed and have good reputation. On the contrary, the breach of ethics in finance and accounting damages the reputation of organization, reduce the customer satisfaction level and lose the trust of investors in the company (Jaihairam, 2014).
Major financial decisions are based on the information provided through accounting and financial statements. Thus it is important for the accountant and finance personnel to be honest in their work. They should not allow biases, pre-judgments, interest conflicts or other variables to interfere or effect on their decisions. Similarly, they should not disclose the financial information to any party without the permission of management or employer unless they are bound by legal or professional rights or requirements. They should offer professional services based on professional standards avoiding actions that stigmatize his own or the company’s name. In addition to these, following the different rules are regulations set by government or legal bodies is also equally important (Yarhmadi & Bohloli, 2015).
It is important to keep in mind that falsifying the financial information for personal benefit or reducing the tax payable can backfire the organization at any moment. Though these seems profitable for some time, it has negative impact on the productivity and profitability of the organization in long run. Following ethical standards can ensure compliance with internal control system that helps to minimize wastage and errors. Being unethical not only hamper the credibility and reputation but also increases the likelihood of criminal activities.
Business rely on ethics either good or bad. The ethics has the power to make or break the company. The unethical practices in finance department not only affect the particular department but the performance of overall organization. Thus it is important to follow the ethical standards to provide accurate, concise and timely reports to stakeholders that helps in maintaining transparency and credibility of the organization. It also helps to establish the company as a role model in the business world.
3M Company has been listed as the most ethical company in 2017 by Forbes (Kaufin, 2017). As per the vice president Kristen Ludgate, the code of conduct at 3M is responsible for this honor as they believe the way of doing business is more important than making profit. The employees who make ethical decisions every day and speak up against anything that they find inappropriate or unclear are responsible for the success of the organization. This proves that success will follow us if we practice being ethical.
References
Jaihairam, P. (2014). Ethics in Accounting. Journal of Finance and Accountancy .
Yarhmadi, H., & Bohloli, A. (2015). Ethics in Accounting. International Journal of Accounting and Financial Reporting, 5 (1). doi:10.5296/ijafr.v5i1.7829
For further actions, you may consider blocking this person and/or reporting abuse
We're a place where students share, stay up-to-date, learn and grow.
Ethics in accounting and finance, which is also known as applied ethics emphasizes on human and business ethics, judgments, moral values and their application in the field of accounting and finance. The accounting ethics revolves around independence, objectivity, integrity, confidentiality, professional competence and professional behavior. Performing the accounting and financial tasks following the ethical standards can help the company succeed and have good reputation. On the contrary, the breach of ethics in finance and accounting damages the reputation of organization, reduce the customer satisfaction level and lose the trust of investors in the company (Jaihairam, 2014).
Major financial decisions are based on the information provided through accounting and financial statements. Thus it is important for the accountant and finance personnel to be honest in their work. They should not allow biases, pre-judgments, interest conflicts or other variables to interfere or effect on their decisions. Similarly, they should not disclose the financial information to any party without the permission of management or employer unless they are bound by legal or professional rights or requirements. They should offer professional services based on professional standards avoiding actions that stigmatize his own or the company’s name. In addition to these, following the different rules are regulations set by government or legal bodies is also equally important (Yarhmadi & Bohloli, 2015).
It is important to keep in mind that falsifying the financial information for personal benefit or reducing the tax payable can backfire the organization at any moment. Though these seems profitable for some time, it has negative impact on the productivity and profitability of the organization in long run. Following ethical standards can ensure compliance with internal control system that helps to minimize wastage and errors. Being unethical not only hamper the credibility and reputation but also increases the likelihood of criminal activities.
Business rely on ethics either good or bad. The ethics has the power to make or break the company. The unethical practices in finance department not only affect the particular department but the performance of overall organization. Thus it is important to follow the ethical standards to provide accurate, concise and timely reports to stakeholders that helps in maintaining transparency and credibility of the organization. It also helps to establish the company as a role model in the business world.
3M Company has been listed as the most ethical company in 2017 by Forbes (Kaufin, 2017). As per the vice president Kristen Ludgate, the code of conduct at 3M is responsible for this honor as they believe the way of doing business is more important than making profit. The employees who make ethical decisions every day and speak up against anything that they find inappropriate or unclear are responsible for the success of the organization. This proves that success will follow us if we practice being ethical.
References
Jaihairam, P. (2014). Ethics in Accounting. Journal of Finance and Accountancy .
Kaufin, J. (2017). The World’s Most Ethical Companies 2017. Retrieved from Forbes: forbes.com/sites/jeffkauflin/2017/...
Yarhmadi, H., & Bohloli, A. (2015). Ethics in Accounting. International Journal of Accounting and Financial Reporting, 5 (1). doi:10.5296/ijafr.v5i1.7829