Importance of Ethics in Accounting
In the accounting profession, there is a published ethical guideline backed by law. Many states also implement their codes of professional ethics. These ethical examinations seek to ensure that CPA candidates and practitioners understand the license and other principles for accreditation as CPAs in the state.
Importance of Ethics in Accounting
Because you handle sensitive information.
As an accountant, you deal with sensitive information every day. When it comes to your business books, you need to handle your business bank account information, transaction totals and other financial data.
In addition to recording the finances of your business, you may also be responsible for handling sensitive employee data (e.g., SSNs and bank accounts).
If you are handling your business books and dealing with the sensitive company or employee information, keep that information confidential and secure.
To keep your accounting information secure, do not email any sensitive data, make sure your WiFi is secure, take firewall and other security precautions in place and be aware of phishing scams. And, should not go for sharing sensitive information.
Use your head when you deal with sensitive employees and business information. When you are managing confidential accounting information, follow best practices to ensure you are as ethical as possible.
If you do not live with accounting ethics and stay up-to-date with accounting rules, then you are bound to make a mess at some point or another.
You are seen as a professional
As an accountant, you are seen as a professional and are expected to do the same thing when you are running a business and handling your books.
Accountants deal with intimate financial statements of individuals and organizations. Some have the potential to execute million-dollar transactions, and others help secure the retirement funds of cab drivers and social workers.
Ethical codes are core principles that accounting professionals use to enhance their profession, maintain public confidence, and demonstrate honesty and fairness. When you join organizations as CPAs or IIAs attempt to protect the reputation of the profession.
Sadly, not everyone who works in the accounting field is reliable. There are daily violations of public and private trusts, and resolution of ethical dilemmas is not always favorable. The following are five areas that capture the attention of anyone considering working in the accounting profession.
Freedom and fairness
Ethics and freedom go hand in hand in the accounting profession. An important component of trust is making unbiased decisions and recommendations that benefit the customer—for example, a display of demand, a conflict of interest under the Freedom Guidelines.
Profit from over-selling of one financial product can lead to a bias that gives financial advice to a customer.
To be objective and independent, it is also necessary to ensure that the recommendations are not subject to outside influence. An accountant’s professional judgment is compromised if they subordinate their decision to someone else’s.
Demonstrating honesty means being straightforward and honest in all business and professional relationships.
Integrity requires that accountants do not associate themselves with information that they suspect is false or misleading – or misleading by omission.
Disclosure of financial information or the disposition of a potential merger by an accounting professional without permission violates the trust that is the foundation of a professional relationship – unless there is a legal or professional reason for doing so.
As technology, law and best practices change, a professional accountant must remain up to date. To make sound decisions, an accountant must stay away from developments that may affect the outcome of the decision.
Practicing proper care means recognizing your skill level and suggesting that you have expertise in an area where you are not.
Consultation with other professionals is a standard practice that helps individuals’ network to generate bond and respect.
Ethics require accounting professionals to follow the rules and regulations that govern their jurisdiction and their bodies of work. Avoiding tasks that can negatively affect the reputation of the profession is a reasonable commitment that business partners and others should expect