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Importance of Accounting Ethics

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Importance of Accounting Ethics

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  • Feb. 2013
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Importance of accounting ethics

Ethics is a branch of philosophy that judge human beings on wrongs and rights concerned with the nature of value and the standards by which human actions can be judged .The term is also applied to any system or theory of moral values or principles. Accounting is the mechanism that offers information regarding the financial position of the organization or business. This type of information is critical to investors as it provides them with important and detailed information that could turn out to be the determining factor as to their decisions to invest or not to invest in a particular organization. Accounting in business is one of the most important departments. Ethical and professional accounting forms a clear financial image of a business, and allows managers to make informed decisions, keepsinvestors abreast of developments in the business, and keeps the business profitable. (Osanyin, 2008) In accounting, there is the professional ethics that guides the accounting profession. Accountants are expected to adhere to the set ethical standards which are designed to ensure that they behave in a way which is ethical and consistent. For most professional accounting organizations, accountants are certified in order to comply with ethics and they are stripped off their certificates if they fail to abide with ethical codes. Therefore, it is common to find unethical behavior in accounting profession. Some of the forms of unethical behavior in accounting are, Providing erroneous information regarding expenses incurred in business Giving out false information on expenses purposely is unethical. In accounting profession, the accountant should always provide the correct information regarding any expenses as failure to do so make the financial status of the business to be false. This affects the profit and loss reports of the business and consequently affecting the performance of the business in the long run. Exaggerating business revenue

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