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Accounting: Ethics and Integrity

Updated on June 12, 2017

Based on the Article III of the California Society of CPAs' Code of Professional Conduct, Integrity is defined as the value, which is the source of public trust and the benchmark against which a member should eventually evaluate all conclusions. During the Enron, WorldCom, Global Crossing and other similar events, the people’s trust in accounting profession have been eroded. However, the accounting profession’s public image for 2003 just got better with a rating of positive 31 percent. This census is according to the Gallop Poll.

Established accounting guidelines help CPA to make accounting decisions correctly. However, it will be the CPA who will make the final judgment to make sure that the accounting management is correct and this will depend on the circumstances. CPA’s decision should be created based on several factors, which includes knowledge in professional ethics. In other words, the CPA and other financial or accounting professionals should use integrity and objectivity to make judgments and other financial decisions. However not everyone is doing established ethics, but Schreiber believes that only small percentage of those professionals are doing an unethical behavior.

Observing ethical guidelines means preserving one’s integrity; an example of these guidelines found in the Sarbanes-Oxley Act of 1992. These guidelines are one of the established accounting guidelines to assist CPA in making proper judgments. Sarbanes-Oxley Act of 1992 does not only assists CPA in making decisions. These guidelines also include necessary details that should contain or should not contain in a financial report. For example is the Sarbanes-Oxley Act Section 302. Section 302 contains financial policies such as: before signing the financial reports; they must review the report carefully first; the financial report should practically present the real situation of the company, and these statements should not contain any false information that will mislead other users of financial statements.

A small unethical issue can also create substantial results, especially if usually done for a long time. If the integrity of an organization has eroded because they did not properly observe ethical guidelines, they will not only lose their investors but also their employees’ loyalty; for example, is creating false information. The employees’ productivity will tend to decline, and theft will begin to emerge. They will lose their clients due to the decline of employee’s productivity, and the possible result will be bankruptcy if nothing has been done to solve such problem. These negative outcomes will be prevented if they continuously observe the proper ethical guidelines.


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