What Is Accounting Ethics? - 1

Topics: Accountancy, Luca Pacioli, Bookkeeping Pages: 3 (708 words) Published: November 11, 2012
What is Accounting Ethics?

The term accounting ethics are formed by the combination of two different words, namely accounting and ethics.

Fortes, (2011) believes that ‘accounting is the collection, measurement, analysis and reporting of events in financial terms.’ While Karthik, (2010) believes that ‘ethics in its broader sense, deals with human conduct in relation to what is morally good and bad, right and wrong. It is the application of values to decision-making. These values include honesty, fairness, responsibility, respect and compassion.’ Therefore, merging the two together will definitely assist in arriving at a proper definition of the term. Hence, accounting ethics can simply be defined as the general rules governing the accounting profession and setting a standard for the practitioners in making the right professional decisions at all times in order to abide by the rules. Dyson, (2010) believes that “accounting ethics relate to the moral code or principles expected to be adopted in the preparation of accounts”. It should be noted that the importance of accounting ethics cannot be underestimated as it plays a vital role in the daily professional activities of an accountant. It is obvious that in the process of carrying out duties as a professional accountant, their will be various challenges as to whose interest is to be protected. In such a situation, if there are no ethics in place, it is possible for the accountant to act unprofessional.

Origin and background of accounting ethics

The history of accounting ethics can be traced to the 15th century when the first known accounting book was published. Luca Pacioli, an Italian mathematician who is also regarded as the "Father of Accounting" wrote on accounting ethics in his first book. The book titled Summa de Arithmetica, Geometria, Proportioni, et Proportionalita, which included two chapters – de Computis et Scripturis – describing double-entry book keeping was published in 1494....
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