Accounting ethics is a field of applied ethics. It refers to the study of moral values and judgments as they apply to accountancy. Accounting ethics is an example of professional ethics. It was first introduced by Luca Pacioli. Later, it expanded by government groups, professional organizations, and independent companies. Ethics are taught in accounting courses at higher education institutions as well as by companies training accountants and auditors.
Due to a wide range of accounting services and recent corporate collapses, attention has been drawn to ethical standards that are used in the accounting profession. These collapses have resulted in a loss of respect and trust in the accounting profession. To combat the criticism and prevent fraudulent accounting, various accounting organizations and governments have developed regulations and remedies for improved ethics among the accounting profession.
The importance of accounting ethics
The work that carried out by accountants and auditors requires a high level of ethics that any other business does not require. Shareholders, potential shareholders, and other users of the financial statements rely heavily on the yearly financial statements of a company. They can use this information to make an informed decision about their investments. They rely on the opinion of the accountants who prepared the statements, as well as the auditors that verified it. These opinions are formed to present a true and fair view of the company. The knowledge of ethics can help accountants and auditors to overcome ethical dilemmas. This will allow them to make the right choice even if it may not benefit the company. The public also relies on accountants and auditors. When an accountant strays from the right “path”, the public will lose respect, trust and faith in all accountants.