Essay On Toshiba Code Of Ethics

As an accountant, it is crucial to abide by the rule of ethics to maintain credibility and stay out of legal trouble. The code of ethics was created to ensure that accountants are honest in their reports and do not knowingly input wrong information for their or a company’s benefit. It sets the definition for what is fair and moral in accounting. Both the AICPA and the IMA have an official code of ethics which both require accounting professionals to be honest in recording accounting reports, known as maintaining integrity (Norton). They both also focus on the concept of Independence which stresses keeping professional relationships between clients as to restrict bias when constructing reports (Norton). Ignoring or not abiding by these rules can result in major consequences, such as a loss of accounting license or hefty fines. Though this code of ethics is in place, some people and corporations still don’t follow these rules. For example, the major corporation Toshiba was recently involved in a 1.2 billion dollar accounting scandal. It all began when company heads introduced
The code of ethics sets rules and consequences in hopes of discouraging events like that from occurring. It’s important to follow the code of ethics because it ensures that you will stay out of trouble. Though Toshiba thought they were going to improve the business by breaking the code of ethics, in the end they only hurt the business, resulting a net loss for their company, and the potential for their business to never restore its reputation. Ernst and Young, a major accounting firm, was faulted for their questionable conduct, and had the potential to face over 100 million dollars in fines for their violations, showing that no one is above the law. Violating the code of ethics can have major reprimands, which shows that the code of ethics is essential in keeping accounting honest and is necessary to abide