Ethics deals with human conduct in relation to what is morally good and bad, right and wrong. It is the application of values to decision making. These values include honesty, fairness, responsibility, respect and compassion. It is usually believed that accountants should be responsible enough to take care of the interests of those they serve. The professional ethics guide accountants to follow a code of conduct so that their services provided can gain public confidence.
The conduct of an accountant is considered ethical if
In order to help accountants make ethical decisions, accounting bodies have developed a set of fundamental principles to underlie ethical behaviour in accounting profession:
Integrity
Accountants must also possess a high level of professional integrity (act with honesty, fairness and truthfulness). They should not indulge in any actual or potential conflict.
Independence and Objectivity
Users of accounting information expect accountants to produce reliable financial information free from all forms of prejudice, bias, subjectivity and partiality.
Compliance with Accounting Standards
Accountants should follow generally accepted rules and practices like international accounting standards as they are more important than individuals and their organisations.
Confidentiality
An accountant must keep information given by the client confidential unless authorised or legally required to make it public.
Professional Behaviour
In all aspects of work, the accountant should behave with courtesy and consideration
An accountant could be legally or professionally penalized for not following agreed rules and practices. Some of the consequences which result from poor ethics in accounting practices are as follows:
