Ethics, principles and their application by the Accounting profession is the topic of this article, and although this may sound like a very boring, and somewhat stuffy subject; it would happen to be quite the opposite today. The corporate world has set the ethics and principles, used by accounting professionals for hundreds of years back to the dark ages. The recent Enron, Martha Stewart, and HealthSouth scandals have caught the interest of the average reader, and astounded the country's accounting profession and legal system. What are ethics, principles, and how did we manage to get so far away from our responsibility?
Ethics and principles deal with the expected behavior and accountability of the accounting profession. In other words, the kind of behavior other people expect from accountants. In most situations, the average citizen isn't familiar with all the codes and regulations imposed by the government; at the same time, if they reside in the United States, they are held subject to all those codes and regulations. At this point, many individuals and businesses turn to an accountant for help in dealing with the tax and legal requirements of living and working in the United States. There is an issue of trust that enters the relationship, since the individual does not know or understand all the codes, regulations, and laws about finance. If the accountant is to remain as a trusted advisor, he or she can't lie to their customer, the public, or the government.
But, thanks to Enron, HealthSouth, and several others, lying has been the accepted behavior from the company CEOs, CFOs, and Accounting Comptroller. What has this done to consumer confidence in corporate America, and their accountants? It has eroded public faith.
When you become an accountant, you should be familiar with the standards and rules of the position, accept personal responsibility for the foreseeable consequence of your actions, and realize the long-term affects of your behavior on the accounting industry and the citizens. At all times, an accountant should conduct themselves with integrity, dignity, and respect for the position held in society.
Unfortunately, this position, like so many others is being abused and neglected when it comes to morals and ethics. Today, we are forced to legislate morals and ethics into the accounting profession, and many others. Although this doesn't normally work, the lawmakers have needed a response to the public reaction of these corporate scandals, and legislation of ethics has been the chosen response.
Other than the courtroom, the accounting profession has its own board of peers that oversees the discipline of members that do not behave in the moral and ethical way they are expected. Suspension of their license, termination of their right to practice, and eve payments of investigation, fines, and penalties associated with their behavior are very common.
Let's hope as the upcoming generation of accountants is ready to don the cap of an accounting professional, they're also ready to be responsible in the performance of the public interests.
Information is for educational and informational purposes only and is not be interpreted as financial or legal advice. This does not represent a recommendation to buy, sell, or hold any security. Please consult your financial advisor.