Accountant's Role In Ethical Behavior In Organizations

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Accountant's Role In Ethical Behavior In Organizations

Accountant's Role In Ethical Behavior In Organizations


In financial transactions, trust is an essential ingredient. The financial reporting process helps people to create trust. However, these financial statements have to be trusted. The financial reporting process is a mean of increasing the trust placed by people in the entities which they deal through the financial statements which are prepared by accounting profession. This paper will discuss the accounting principles and theories, the creation of accounting governing organization, and public perception of CPAs in today's society, pitfalls that they may encounter, and consequences they may face should they fall short.


The importance of ethics in accounting and financial decision making is to ensure the integrity of financial information. Professional judgment is based on ethical behavior, which refers to doing the right thing and applying accounting skills. Ethics is a process that evaluates actions done by the employer or employees from the perspective of moral principles or values. This process raises questions concerning fairness, justice, rightness, and wrongness. Therefore if each organization appears to be ethical it makes good business sense because a good public image is a valuable asset. Many organizations profit from a good reputation for being ethical and making good financial decisions; which attracts customers and investors.

The organizations who have implemented ethical dimensions to the daily decision making process are in a stronger position in today's economy. These organizations will gain a good reputation for being ethical and attract new customers, staff, as well as new investors. All these benefits will contribute to the financial status of the organization and failure to do so will lead to poor financial performance. Organizations are turning to newer measurements that assess measured success factors, which should provide an accurate indication of performance. Business Organisations may be visualized as organised groups or communities that specialise in manufacturing various types of products or provide, services of various kinds. The free dictionary (2006) defines business organisations as, ?an area of law that covers the broad array of rules governing the formation and operation of different kinds of entities by which individuals can organize to do business?. Carter McNamara (2006) defines Organisations as,? a group of people intentionally organized to accomplish an overall, common goal or set of goals. Business organizations can range in size from two people to tens of thousands?.

These organisations differ based on the goals and objectives that they aim to achieve. Some organisations may be for profit while others may be not for profit while some others may be charitable organisations. Various characteristics of an organisation include a cohesive group of mostly like-minded people working together to achieve certain goals and objectives. Typically, business organisations work towards achieving a vision, which is often directed by a mission statement. Various strategies are formulated in order to achieve various objectives within constrains of environment in which the business operates. The process is defined as strategic management and may be spread across all functional ...
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