A Code Of Ethics Should Do More Than Establish Minimum Acceptable Standards

When auditing a publicly held company, auditors need to observe principles. The ethical principles of the American Institute of Certified Public Accountants (AICPA) Code of

Proper conduct and ethical behavior are important, because auditors are party to confidential information and it is important this trust not be abused. This essay discusses the purpose of the American Institute of Certified Public Accountants (AICPA) and delves into the definitions of the six principles of the Code. It explores to whom this Code applies and what should be considered its key principle. The next

Accountants owe the duty to act in a professional and ethical manner concerning clients, as well an obligation to respect the laws that are involved with the profession. This is where a crossroads of ethics and legalities are formed and potentially the defining point of crucial decision-making. Stephen Richards and his actions under employment with Computer Associates (CA) are then examined in light of this concept.

Accountants and auditors are often faced with having to make decisions that bring ethics into question. The American Institute of Certified Public Accountants (AICPA) sets the standards for professional conduct that dictates what accountants are allowed to do and what they are not allowed to do. However, issues do arise that have not been addressed by the AICPA and when this occurs it is up to management to use their best judgment to make a determination about the ethical implications of their actions (Allen, 2011).

Ethics are crucial to the accounting profession and the business world, so choosing an ethics system to base your moral decisions on is extremely important. Accountants and all business professionals will be confronted with moral dilemmas on a daily basis. Being strong in your faith and knowing what you believe in will help you to always make the right decision. Based on this reasoning, this essay will explain why deontology is the best ethics system for the accounting profession.

     The accounting system is constantly changing. During these changes, it is important for accountants to adhere to the high ethical standards that they have always lived by. Adhering to the high ethical standards is an accountant's obligation to the public, the profession, and themselves. An accountant's ethical conduct usually lies within four different areas. This includes competence, confidentiality, integrity, and objectivity. NYSSCPA.ORG states, "Members also have a continuing responsibility to cooperate with each other to improve the art of accounting, maintain the public's confidence, and carry out the professions special responsibilities for self-governance," (Article 1).

When determining and defending the use of a particular ethical system within the confines of a profession, it is important to evaluate the system in terms of the professional culture as well as the expected professional conduct laid out within the vocation itself. The accounting profession has been evolving for thousands of years. Early accounting records date business transactions back as far as third century B.C. (Schroeder, Clark, & Cathey, 2009). Early record keeping was for internal purposes and as societies and economies expanded, it became important to maintain records for external purposes as well. According to Schroeder, Clark & Cathey (2009), by the ninetheeth centruy, bookkeeing expanded into accounting (p. 3). From this time, it has been the duty of the accountant to serve the public interest and the profession has been culitvated into an organizational culture with professional norms and standards constantly taking shape in an effort to complete an all-inclusive conceptual framework.

Integrity – Accountants should always ensure that they are honest and straightforward in their activities with every instance that they have clients. They should always maintain the lines of duty and maintain business relationships during all official duties (Nobes, 2015).

The accounting professional is an industry in which professionals are commonly faced with hard decisions to act in an ethical manner. According to Enofe, Nakpodia,& Moruku, “Ethical guidelines do not aim to provide instant solutions for all ethical issues, rather, ethical guidelines aim to help in the decision-making process” (2014, p. 144). For the accounting profession, such guidelines and regulations are set forth in the AICPA’s Code of Professional Conduct (code). This code helps to set boundaries for accounting professionals’ interactions with the public, their clients, and also their colleagues (AICPA, 2014, p. 5).

Ethics in any industry is important, but for Accounting professionals and those in need of their services, it is a particularly stressed element. Information provided by accountants is used to make major decisions, including investing, downsizing, expanding, etc, so accountants are expected to be competent, reliable, and have a high degree of professional integrity. Because of these high expectations, the professional accountancy industry, like many other professions, has adopted professional codes of ethics (Woelfel, 1986). These ethical codes go above and beyond the requirements for state or federal laws and regulations. There are several professional organizations within the

110.1 - The principle of integrity imposes an obligation on all Members to be straightforward and honest in

The formal definition of ethics is as follows, moral principles that govern a person’s behaviour or the conducting of an activity or alternatively the branch of knowledge that deals with moral principles. (Ethics definition: dictionary.com, 2014)

The auditing profession by nature entails a person to be as trustworthy as they can possibly be since the need to be free from “undue influence” is not only expected but should exceed all expectations. The need for an auditor to have a clear mind, free from all distractions, can be compared to a surgeon attempting to perform a high-risk surgery where his actions would ultimately determine whether the person undergoing the surgery lives or dies. Saving lives is a universal principal and almost everyone acts upon it and so we have more lives saved than lost. Similarly stakeholders’ trust that auditors will act with integrity and honesty, which will enable them to see beyond the greed of money, therefore, act in the appropriate manner that will sustain the livelihood of the stakeholders. Relating to the importance of honesty, the authors highlighted Immanuel Kant theory, ‘Kant’s first categorical imperative, the universalizability principle: ‘act so you can will the maxim of your actions to be a universal law.’ Which supports the notion that it is also in the best interest for auditors to be ethical and trustworthy in order to sustain the functions of auditing. For example, if every auditor was to engage in dishonesty and unethical practices, they run a high risk of undermining the confidence and trust that stakeholders have placed on them. Without this public trust, the whole institution of

Ethics is a term that is commonly used to describe a code or moral system that serves as a criterion for assessing right and wrong. Professionals operating in the business world usually face ethical dilemmas, which are situations where a person or group is faced with a decision that tests the moral system or code. While most of these dilemmas are easy to identify and resolve, they come with temptations that test a person's or group's ethics. Similar to others operating in the business world, accountants experience some ethical dilemmas that are complex and difficult to resolve (Langenderfer & Rockness par, 2). The complex and difficult to resolve ethical dilemmas require more than technical competence to deal with them.

It is, without a doubt, imperative that accountants today must be ethical. “Most ethical dilemmas managers face in the workplace are highly complex,” says “Public Relations Tactics” (19). Businessmen, particularly accountants, manage and oversee assets so large that even a moment of unethical behavior could be detrimental to a company. One incorrect spreadsheet has the ability to show that millions of dollars never came in, that millions have been lost, or even that millions are still there even though they have been transferred into a personal account completely separate of the company. To avoid hiring corrupt, greedy accountants, companies began giving out a written ethics test as part of the hiring or training process. They were using questions like “If you watched a twenty dollar bill fall out of someone’s pocket as they left the room and there was no one else