An article ‘Ethics In Accounting, Finance and Banking: Toward a More Comprehensive Integration’, which was published by the Business School of Navarra University on July 1, 2014, states that there are various questionable practices of financial institutions and accountants. This fact has raised ethical concerns. After the global economic crisis of 2008, the morality of professional accountants has become a major global concern. The reason is that the ethical standards play a critical role in avoiding future losses. In most countries, the public has questioned the role of banks in managing questionable activities leading to the rise of cases of notorious scandals. Public concerns pressured the accounting bodies in several countries to launch investigations, especially in auditing activities.
All business stakeholders rely on the results of commissions that investigate the loopholes that cause fraudulent activities. The commissions of inquiry, including the international task force initiated by the International Federation of Accountants (IFAC), found common causes of the crisis and suggested solutions necessary to reduce the degenerated values in the financial industry.
Investors and the general public demanded a definition of the proper role of banks in managing accounting activities. The industry is still open to new contributions that will enable the accounting bodies to manage their members. In order to receive contributions, a symposium held at the Business School of Navarra University provided a forum for both experienced and amateur accountants to share their views on improving ethics in business. With integration of ethics in business as the theme of the symposium, the forum allowed accountants to interact and share ideas on ethics and morality. The accountants had the opportunity to reflect and discuss the appropriate role of ethics in the entire financial industry. Topics of discussion entailed a wide spectrum, including philosophical and anthropological issues.
Although the strict dependence on professional rules narrows the accountants’ choices, equating ethical behavior and morally good behavior with compliance to the rules is the natural way of reinforcing ethical values in society (Hoffman, 2006). An accountant's work naturally demands trust from clients, because the decisions are extremely important in determining the course of the economy. According to Hoffman (2006), maintaining the confidence of clients requires high standards of ethical conduct, especially for public accountants who are responsible for providing their professional advice to the clients. Both public accountants and those hired by companies need to develop and maintain honesty and integrity in delivering their services.
Public accountants may be responsible for services such as taxation and assurance. They should ensure confidentiality and be committed to the clients' interests and concerns. The standards set by professional bodies of accounting are meant to ensure that all members comply with the rules and regulations, and their activities match customer expectations (Campbell and Houghton, 2005).
Integrity requires an accountant to exhibit honesty and straightforwardness with clients. It is an extremely important part of the ethical code. Due to the sensitivity of the information, accountants should restrict themselves to high standards of truth and transparency. Therefore, they should refrain from giving false information or hiding some parts of it (Campbell and Houghton, 2005). Information (whether public or confidential) should be detailed. Accountant should intentionally include all required information in their official reports to avoid secrets and loopholes. Concealing information, especially concerning errors in the financial reports, leads to more errors and lack of confidence and trust from clients.
Usually professional accountants do not agree on the level of detail. They have numerous differences in opinions concerning how transparent a report should be. However, they all agree on the fact that professionals should refrain from intentionally modifying or concealing financial information for personal gain at the expense of their organizations. To ensure accurate information and minimal chance of manipulation of figures and financial data, both public accounting firms and private organizations strive to develop a code of ethics to govern the activities of their accountants. Accountants are required to be consistent and adhere to the company’s rules, or face consequences regarding their actions. The code of ethics is based on honesty and transparency (Albrecht, 2007). Adhering to the code of ethics is a vital aspect of forming an effective accounting team.
Not all people are born with the natural ability or knowledge to exhibit high ethical standards without any training. Therefore, teaching and training them about a code of ethical behavior is a crucial activity. Moral guidelines are extremely important for ensuring knowledge of expected ethical behavior among professional accountants. Expertise is based on three crucial aspects: an accepted body of knowledge, an acceptable standard of qualification, and a reliable (and influential) code of ethics. The role of both educational institutions and professional organizations is to produce experts who share certain common values of a democratic culture. Some people may not access or achieve the desired ethical behavior all by themselves. Moreover, if everyone was allowed to acquire the acceptable ethical behavior, then there would be no standard for determining the level of conduct. Without the standardised measurement of ethical behavior that distinguishes right from wrong, scandals in companies would rise. As a result, it would be impossible to control unethical behavior (Calhoun, Oliverio and Wolitzer, 2009).
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I conclusion, the article has clearly demonstrated that involving accountants in designing the rules to govern their practices is a noble idea mainly because they are the ones that come up with the creative elusive ways to get away with fraud. According to the article, the scandals have led to a sharp drop in confidence of the effectiveness of accountants. The most sensitive sensitive accounting roles include auditing and corporate governance practices. Therefor, an acknowledged accountant is directly related to the product of high ethical conduct. Maintaining high levels of morality and ethics makes a professional accountant worthy of trust.