Ethics and Accounting

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Ethics and Accounting
In the professional field of accounting there are vast opportunities that accountants are faced with every day in regards to ethics. Accountants are given the position to maintain the financial status of businesses as well as individuals. Businesses hire accountants to keep accurate financial records so that the business has the opportunity to provide goods and services to consumer. These financial records are important to promote healthy business decisions. If a company is not able to maintain proper financial records of income and expenditures the company has little chance of surviving. This is the purpose behind accounting. Accounting as defined is the system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results (Merriam-Webster, 2013). This amount of control opens the door for opportunities of producing financial records that can be fraudulent and unethical. Since the turn of the century, into the 2000’s, there have been numerous scandals that have rocked the finance world. Most notably the Enron scandal has been the most widely publicized accounting scandal. Enron was a multi-billion dollar corporation supplying energy sources in the United States. Fraud, false reporting of revenues, and poor accounting eventually caused the collapse of this powerful corporation and the loss of thousands of jobs (Raver, 2006). The collapse of this energy giant prompted Congress to pass the Sarbanes-Oxley Act of 2002. This act establishes rules to govern the way businesses trading on the open market have to report their financial status. Sarbanes-Oxley has set in place guidelines how financial reports are to be prepared and submitted for public use, as well as guidelines for the ethical practices senior financial officers are to abide by. This act also establishes penalties including fines and imprisonment for those officials found guilty of violating the Sarbanes-Oxley Act....
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