Accounting

Question 1 The ethical guidelines which accountants are obliged to follow in the conduct of their work are made to combat criticism and gain credibility by preventing fraudulent accounting. Accountants ought to be able to maintain impartiality and independence to create a clear, credible and unbiased audit. Hence, the ethical principles are considered important. This is because the work of accountants requires a high level of ethics since the financial statements prepared and verified by auditors reflect the true and current financial performance of the company, in which the management heavily relies on for decision-making. The public and company need reassurance that those responsible for reporting adhere to high standards in their conduct and professional practice. The ethical guidelines indicate to the accountant what is right and wrong, and aid an accountant in making value-based decision when dealing with issues. According to Wiley (2006), accountants should make ethical decisions and exercise moral judgment in the performance of professional duties. Other than that, high-quality professional standards can be produced with the guidance of code of ethics (International Federation of Accountants [IFAC], 2005). Without ethical guidelines, companies would be manipulating their financial performances due to rising competition in order to meet their analyst forecasts for net income. The involvement in fraud can cause the clients to lose confidence and trust in an accountant, and eventually affecting the company’s performance as well as reputation. In the event the accountants do not follow the ethic guidelines, an accountant can be barred from practicing. An accountant may even be expelled from the professional organization. The statement “Triple Bottom line reporting has little relevance to the reporting company or its stakeholders if it is not aligned with the company’s overall business strategy” means that a company that does not take into consideration of