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importance of ethics in accounting/financial decision making

Using the Internet, and/or other sources, locate an article discussing ethics in accounting and financial decision making.

Can a small review be done w/ siting information ( this does not have to be extremely long) / like a summary of the article

Discuss how the concepts of the article relate and/or apply to an organization.

Make recommendations for improvement for an organization based on the article.

Explain the importance of ethics in accounting and financial decision making. Be sure to include a description of the 2002 Sarbanes-Oxley Act and its impact on accounting and financial decision making


Solution Preview

The purpose of ethics in business is to direct business men and women to abide by a code of conduct that facilitates, if not encourages, public confidence in their products and services. In the accounting field, the AICPA maintains and enforces a code of professional conduct for public accountants. The Institute of Management Accountants (IMA) and the Institute of Internal Auditors (IIA) also maintain a code of ethics. Professional accounting organizations recognize the accounting profession's responsibility to provide ethical guidelines to its members.

The main reason for having ethical guidelines is not to provide a cookbook solution to every practice-related problem, but to aid in the decision-making process for situations that involve ethical questions. Business persons will encounter novel situations in their jobs and will need ethical guidelines to handle them effectively. Ethics codes are necessary to provide such guidance.

While disclosure is an important component of any discussion of accounting ethics, some would argue that the more complicated ethical issues arise due to features external to the profession itself, which cause moral difficulty for an individual and/or professional. In other words, the chief ethical difficulty for the accountant has its roots in independence and objectivity. Whether an accountant is viewed as an employee, management, consultant or independent auditor, conflicts of interest arise based upon these primary virtues of objectivity and neutrality that are associated with the accounting professional.

These conflicts are certainly apparent to the public ...

Solution Summary

Explain the importance of ethics in accounting and financial decision making