INTRODUCTION At times we may wonder what is meant by ethics, why accountants need ethics in their business life or even how they are related. As we may know, definitions of ethics vary with time but in most cases it is defined” With these definitions we can understand that basically ethics is knowing what is right (Mitchell 2009). Ethics in accounting and finance a global concern today (Onyebuchi, 2011). However, the accounting and finance sector has over the past years developed a culture of ethical misconduct (Gianneti & Yue Wang, 2014). According to Anup & Chadha (2005), Ethical misconducts often lead to corporate scandals that come with serious consequences e.g.
The responsibilities of an audit partner in an accounting firm is to review the accounting actions performed by their client and notify them of any corrections that are required. The CFO of a large public company should oversee all of the company’s finances so that it is steered in the right direction. The audit partners role is weighted heavier in that their responsibility is to the public, not just one company. If the CFO is unable to do his/her duties, then the audit partner should find and report those inaccuracies. The stress of the audit partner is tremendous and choosing that profession is one that I would prefer not to undertake.
The House had passed the Oxley bill in April 2002, which was related to the accountability, responsibility and transparency of stating financial status of the company. At the same time Senator Paul Sarbanes had another proposal on the similar lines. He presented the bill to the Senate Banking Committee which passed the bill with a majority. Thereafter both the proposals made by House Representative Oxley and Senator Paul Sarbanes were reconciled to be formed in to one act, which is now popularly known as the Sarbanes Oxley Act. Sarbanes Oxley came into force mainly due to the financial scandals committed by corporate giants like Enron, WorldCom, etc.
As an auditor one is required to remain objective, an auditor should at all times remain independent in fact and appearance. They should take special precautions to assure there is no conflict of interest. An auditor is required to make an unbiased opinion on the financial stability of an organization (Schumerhorn, 2012). It is customary to charge a fee for auditing services, this is how auditing firms produce revenue to support their business and employees. However if this fee comes from the agency in which is being audited this firm is subject to scrutiny in regards to the audit.
Sarbanes-Oxley Law Stephanie Mosley ACC 340 University of Phoenix Richard Calabria 07/23/2012 To enhance the dependability and accountability in an effort to safeguard shareholders, the federal government for the United States of America established the Sarbanes-Oxley Act on July 30, 2002. The Public Company Accounting Reform and Protection Act of 2002 is also used to refer to this law. Numerous acts of corruption in the business sector continued throughout the late 1990s as well as early part of 2000 with no laws to prevent it. In response to the very public case of WorldCom and Enron fiscal scams, the Sarbanes-Oxley Act of 2002 (commonly called SOX) was passed to protect the public and investors from unfair practices and accounting mistakes (Rouse, 2007). In order to safeguard shareholders, the president at that time President George Bush pushed for the act to get passed by the Senate and House of Representatives.
According to SNC-Lavalin's Gadhafi disaster: The inside story, SNC-Lavalin Group Inc. has committed to ethical behaviour and good corporate governance as it awaits the outcome of investigations involving former employees, including its previous chief executive officer. With regard to the school of ethical universalism, the same standards of what's ethical and what's unethical resonate with peoples of most societies regardless of local traditions and cultural norms; hence, common ethical standards can be used to judge the conduct of personnel at companies operating in a variety of country markets and cultural circumstances. Ben Aissa had negotiated an unusual deal with his old bosses at Lavalin: he, with at least one of his new wife's relatives, would together earn a 2% commission on any SNC contracts in Saudi Arabia, regardless of whether they performed any work, and this arrangement is considered unethical and conflicted. This constitutes unethical business behaviour regardless of the country or culture in which a company’s personnel are conducting activities. In terms of school of ethical relativism, different societal cultures and customs have divergent values and standards of right and wrong and thus, what is ethical or unethical must be judged in the light of local customs and social mores and can vary from culture or nation to another.
Ethics Paper MGT498 Ethics Paper One of the biggest things that big named organizations sometimes tend to forget is that when difficult decisions must be made, they affect everyone within that organization. Whether it be budget cuts leading to loss of hours or layoffs, lower stocks percentages for the shareholders or it can even change things positively, and require more production of hiring. Either way, when issues come up and things change, it is important to keep everyone involved well informed and made in the best interest of those directly affected. In the business world, corporations have a responsibility to the employees as well as the stakeholders to be ethical in their decision making by staying true to their beliefs and behavior to society. When unethical decisions are made, everyone involved in the corporation and its well being are affected in a negative way and will jeopardize the well being of the business.
The employees are affected because if something was to go wrong they may lose their job because of the company faults or not get paid like they should. Other that may be affected by this are stockholders, customers, consultants, independent contractors, and auditors themselves. Ethical Values: What ethical values are demanded of auditors and accountants? Integrity is important because it requires accountants to be honest, candid, and forthright with a client’s financial information. Objectivity and independence remain free from conflicts of interest and other questionable business relationships when conducting accounting services.
has a large risk in fraudulent factors due to working with many companies throughout the United States. National Commission of Fraudulent Financial Reporting is an independent private sector that investigates these behaviors. I believe and recommend that our company should have independent auditors for SEC and other regulations that apply to our business. We must also put into place education and promotional awards to reduce employee’s faulty performance. Our business ethics are honest and loyal in which we serve our employee’s with high standards.
If a CPA or CPA firm first serves as a consultant then as the given entity’s auditor, it is auditing its own work. In that way, nobody else is actually going to check whether a certain accounting treatment is compliant with GAAP. Different opinion resulted from different understanding about an issue would not be raised. Moreover, generally speaking, human beings are reluctantly to admit their mistakes. The CPA or CPA firm would at least have reputational interest in the financial report that it “managed”.