ETHICS OF ACCOUNTING
ETHICS OF ACCOUNTING
CONTENT
Meaning of Ethics
Meaning of Accounting Ethics
Qualities of Accountants and Accounting Ethics
Benefits of Accounting Ethics to the Accounting Profession and the Public (Society)
Meaning of Ethics
Ethics can be defined as established codes of conduct, modes of behavior, pattern, practice, standard and principles generally accepted or strictly adhered in a given profession or situation.
Meaning of Accounting Ethics
Accounting ethics is used to refer to generally accepted codes of conduct, standard, practices and principles of accounting to be strictly adhered to by accountants/professionals in accounting profession.
Qualities of Accountants and Accounting Ethics
Honesty: Honesty means to be truthful, candid and forthright, It is the absence of lies and deception.
Transparency: Transparency means to be open-minded, being straight-forward in dealing with clients without hypocrisy and pretense.
Integrity: An accountant should behave with integrity in all professional, business and financial relationships. Integrity implies not mere honesty but fair dealing and truthfulness. Integrity is an important fundamental element of the accounting profession. Integrity requires accountants to be honest, candid and forthright with a client and financial information.
Accountability: Accountants should acknowledge and accept personal accountability for the ethical quality of their decisions and omissions to themselves, clients, and their companies. Accountability simply means being responsible for any cause of action or the ability to be depended or relied upon.
Fairness: Fairness means to be just in all dealings. Not to exercise power arbitrarily or use overreaching or indecent means to gain, maintain any advantage nor take undue advantage of another’s ignorance or difficulties. Fairness also means to be open-minded
Objectivity: Objectivity is the state of mind which has regard to all considerations relevant to the task in hand but no other; Objectivity is essential for any professional person exercising professional judgement. It means accountants should not allow bias, conflicts of interest or undue influence of others to override professional or business judgement. It is sometimes described as ‘independence of mind’
Trustworthiness: Trustworthy is the state of relying and depending on someone’s ability, professional competency. It simply means to believe somebody sincerely. Accountants should be competent enough to be trusted by the client in all professional standards and business.
Qualities and
Accounting ethics:
-honesty
-transparency
-integrity
-fairness
-accountability
-objectivity
-trustworthiness
These are some of the qualities that are important in accounting ethics. Honesty, transparency, and integrity are essential for creating trust between accountants and those they work with. Fairness and accountability ensure that accountants treat everyone fairly and responsibly. Objectivity ensures that accountants are making decisions based on facts and not personal biases. Trustworthiness is essential for maintaining the confidence of clients and colleagues.
Evaluation
1. What is the most important quality in accounting ethics?
A. Honesty
B. Transparency
C. Integrity
D. Fairness
E. Accountability
2. Which of the following is NOT a quality of accounting ethics?
A. Objectivity
B. Trustworthiness
C. Honesty
D. Fairness
E. Transparency
3. Which of the following is NOT a quality of accounting ethics?
A. Accountability
B. Fairness
C. Trustworthiness
D. Objectivity
E. Honesty
4. What is the most important quality in accounting ethics?
A. Honesty
B. Transparency
C. Integrity
D. Fairness
E. Accountability
5. What is the most important quality in accounting ethics?
A. Honesty
B. Transparency
C. Integrity
D. Fairness
E. Accountability
Marking Guide
1. C. Integrity
2. D. Fairness
3. E. Honesty
4. A. Honesty
5. A. Honesty
Benefits of Accounting Ethics to the Accounting Profession and the Public (Society)
(a) Accounting Profession
Ensures standard in accounting profession
Ensures accountant’s integrity, transparency and objectivity in accounting practice.
(b) Public
It protects the public from unscrupulous Accountants and corporations
It prevents hiding or mis-representation of information to society
EVALUATION
- Define ethics in accounting
- List five professional ethics in accounting
- Briefly explain three of the ethics mentioned
- Mention four benefits of accounting ethics to accounting profession and the society
