Explore BrainMass

Ethics Article Review: Ethics in accounting and financial decision-making

Books by Albrecht, and Brealey, (Accounting Concepts and Applications), and (Fundamentals of Corporate Finance), and/or other sources, locate an article discussing ethics in accounting and financial decision-making. Address the following items in your review:

Briefly, summarize the article.
Relate the article to the assigned reading of Accounting Concepts and Applications, Chapters 1, 2, 3, 4, and 6.
Discuss how the concepts of the article relate and/or apply to some organization.
Make recommendations for improvement for the 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.
Properly cite the article in your review. Give references.

Solution Preview

Please see response attached for better formatting, which is also presented below. I alos attached an article to consider and an excellent APA reference. I hope this helps and take care.


1. Briefly, summarize the article.

I located one article for you to consider, which is discussing ethics in accounting and financial decision-making. As you read the article (attached for convenience and because sometimes articles are no longer available on-line) try to answer the following questions: What is the main point made in the article? What are the authors trying to say, and what evidence do they provide to back up this point or points?

The article Business and Accounting Ethics by Smith and Smith (2003) discusses the importance of ethics in society in general, and in accounting and business specifically. In fact, in today's business world, ethics is imperative and in fact there is a tremendous emphasis on ethics and the financial decision making process within organizations. In fact, all organizations are expected to behave in an ethical manner in the current economy. There are many factors that influence organizations to
ensure and enforce ethical policies, mainly values, ethics codes and ethical leadership (Smith & Smith, 2003).
According to Smith and Smith (2003), the purpose of ethics in business is to direct businessmen and women to abide by a code of conduct that facilitates, if not encourages, public confidence in their products and services. They also make the point that values can be taught through education, and indeed must be taught in Management courses. It is more likely, argues Smith and Smith, that business people will then follow the ethical guidelines set by most professions. For example, 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.

To illustrate the importance of ethics in accounting and financial decision-making, Smith and Smith (2003) initially build a case for the importance of values at the personal level (e.g., citizens, business people, etc.). They argue that whether a person derives ethical values from religious principle, history and literature, or personal observation and experience, there are some basic ethical guidelines to which everyone can agree. They quote the voice of James Brackner, member of the IMA Committee on Ethics who, in the July 1992 issue of Management Accounting, stated:
"The universities are responding with an increased emphasis on ethical training for decision-making. For the most part, however, they ...

Solution Summary

By addressing the questions, this solution provides an article review on an article discussing ethics in accounting and financial decision-making. Article is included, as well as references.