About Ethics In Accounting (58a)

Ethical behavior is a fundamental principle that should be followed in all aspects of business, regardless of the specific function or role. It means conducting business in a fair, honest, and responsible manner. This includes treating employees, customers, suppliers, and other stakeholders with respect and integrity. By adhering to ethical behavior at all times, businesses can build trust, maintain a positive reputation, and contribute to a sustainable and ethical business environment. Therefore, the statement that ethical behavior applies at all times, in any function in business, is true.

The "separation of functions within the department" refers to the practice of dividing different tasks and responsibilities among different individuals within the accounting department. This is an example of an internal control because it helps to prevent fraud and errors by ensuring that no single person has complete control over a financial transaction from start to finish. By separating functions, there is a system of checks and balances in place, reducing the risk of unethical behavior and promoting transparency and accuracy in accounting practices.

New disclosure standards require companies to institute internal control systems and assess those systems annually. Companies also are required to provide full disclosure of off-balance sheet items in periodic reports. In section 802, the act clearly states the penalties for unethical accountants, which includes fines and imprisonment.

The IMA notes the following ethical standards in managerial accounting: competence, confidentiality, integrity and credibility

Objectivity and independence are important ethical values in the accounting profession. Accountants must remain free from conflicts of interest and other questionable business relationships when conducting accounting services.

Ethics refer to the level of honesty you carry into your job. In principle, ethics are subjective and can vary between individuals with opposing views of right and wrong, which is why codes of ethics are created by certain groups to govern themselves. In accounting, there is only one acceptable position -- complete trust and honesty. Never are accountants more tempted to forgo that ultimate ethical duty as when cash accounts are involved.

The article discusses the effects of ethics in accounting, including the impact on business reputation, personal consequences, criminal activities, and the usefulness of financial statements. Ethics in accounting can affect a company's reputation, as unethical practices can damage trust and credibility. It can also have personal consequences for individuals involved, such as loss of job or legal repercussions. Additionally, unethical accounting practices can involve criminal activities, such as fraud or embezzlement. Finally, ethics in accounting is crucial for ensuring the accuracy and reliability of financial statements, which are used by stakeholders to make informed decisions.

In accounting, ethics and integrity standards are based on a broad commitment to honesty, impartiality and objectivity. Ethical standards also require that accountants present information in the clearest and most accurate way possible, with the expectation that the information constitutes an independent report of a business' financial situation.

Integrity is an important fundamental element of the accounting profession. Integrity requires accountants to be honest, candid and forthright with a client’s financial information.

The article discusses the entities that created the Generally Accepted Accounting Principles (GAAP) which define the ethical practices and principles of accounting used by businesses. The Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) are mentioned in the article as being responsible for the creation of GAAP. The American Institute of Certified Public Accountants (AICPA) is not mentioned as being directly involved in the creation of GAAP.