Ethics in Accounting: Upholding Professional Standards at ACC KarParts

Accountants are responsible for upholding professional ethics and standards. Negligence and misconduct in the financial reporting process can have serious consequences, including litigation, censures, suspensions, and fines. It is important to understand the role of ethics in accounting to avoid these consequences. Accountants are responsible for reporting the financial health of an organization. They help organizations make critical decisions that influence growth and development. Unethical practices may lead to the fall of an organization. Accountants need to be honest, accurate, and impartial. Further, they should put the company’s interest before theirs. As an accountant, I will need to act professionally and advise Quinn on how to manage the company’s financial situation by acting responsibly, ethically, and professionally while making recommendations to meet the 30% profit target and earn the commission.

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Ethical Principles in Accounts

Ethical principles of accounting are essential to the success of any business. The most important ethical principle in accounting is the fiduciary duty: the obligation to act with loyalty and care in managing someone else’s money. Edi & Enzelin (2022) posit that this principle requires accountants to ensure that the financial interests of their clients or employers are protected and that their decisions are honest, accurate, and impartial. Other important ethical principles for accounting include maintaining professional integrity; avoiding conflicts of interest; adhering to applicable laws, standards, and regulations; protecting confidential information; and refraining from unethical activities such as fraud or manipulating financial records. Together, these principles form an ethical code of conduct—the foundation for any successful accounting practitioner. Quinn, as my supervisor, understands these principles; thus, I would ask her to consider our professionalism and uphold it. As accountants, it is important to act professionally and uphold the ethical principles of accounting.

The Importance of Ethics in Accounting

Ethical principles are important in accounting. They help set ethical standards, which maintain trust and credibility with the public, allowing accountants to provide valuable services to their clients and help build a stable global economy. At ACC KarParts, there are ethical standards established to help the company grow and develop financially (Kiradoo, 2020). These ethical standards also ensure that ACC KarParts’ accounting processes are accurate and reliable. Moreover, adhering to ethics can help protect us from costly lawsuits and regulatory actions. Although fines are expensive, litigation can destroy a company’s reputation and even put its future at risk if the misconduct is serious enough. The company also provides a source of income for both of and thus, it is important to protect our employment contracts and safeguard our income. Nonetheless, ethics in accounts is about more than just following the rules; it’s about doing what is fair and honorable, taking responsibility for our actions, and striving for honesty. Doing this will help Quinn and me build a successful career in accounting as we adhere to ethical principles.

Impact of Unethical Accounting Practices

As an accountant, I ensure that all ethical accounting practices and regulations are followed at ACC KarParts. The responsibility is paramount and comes before my interests and those of my superiors. Kiradoo (2020)  argues that unethical accounting practices can significantly impact a business, ranging from hefty fines to sanctions and even criminal prosecution. Quinn proposed to shift financial reports to help us earn the commission, which was unethical. This action would lead to consequences of unethical practices including:

• Litigation: If any unethical accounting is discovered by investors, shareholders, or tax authorities, it could lead to litigation from parties whom the actions have harmed.
• Censures: Financial regulators such as the SEC may take disciplinary measures against ACC KarParts and us for cooking reports in our financial books. This could result in censures or suspensions, which include restrictions on Quinn and I and ACC KarParts from engaging in certain activities.
• Fines: Depending on the seriousness of the infraction, fines can be imposed on both of us for the fraudulent accounting activities we practiced.
• Strategies to Meet Profit Target

Meeting the target was a challenge at that time of the year, regardless of the commission we wanted to earn at the end of the year. However, meeting it was the only ethical way to earn the $30,000 and $60,000 between Quinn and me. I had to strategize how to increase our business activities, reach the target, and earn the bonus commission. To increase our sales, we had to promote our products through the media, the internet, and social media platforms. Nonetheless, could introduce a promotion for our customers to spend more on us and enjoy unlimited benefits such as discounts, winning prices, and other rewards. Also, we could cut on other expenses to help us reduce the prices of our products and sell more as part of the end-year promotion project. These measures would help us increase our sales rate, meet or even surpass our targets, and earn a commission.

Conclusion

Ultimately, ethical principles in accounts are essential in modern business. Ethical lapses in accounting can lead to costly fines, litigation, and censures which can have long-term implications. As a result, it is important to ensure that all financial reporting and analysis adhere to ethical standards (Rogošić & Perica, 2022). Organizations should implement strategies to meet profit targets without compromising ethical principles by using such measures as financial reporting standards, internal controls, disclosure policies, and auditing standards. By following ethical principles and making them a priority, businesses can ensure accurate and transparent financial reporting, which is beneficial to the organization and its stakeholders in the long run.

References

Edi, E., & Enzelin, I. (2022). Analyzing the Effect of Accounting Ethics Toward the Quality of Financial Report. Journal of Accounting Finance and Auditing Studies (JAFAS). https://doi.org/10.32602/jafas.2022.009

Kiradoo, G. (2020). ETHICS IN ACCOUNTING: ANALYSIS OF CURRENT FINANCIAL FAILURES AND ROLEOF ACCOUNTANTS. International Journal of Management, 11(2), 241–247.

Rogošić, A., & Perica, I. (2022). Affective professional commitment and accounting ethics principles: examining the mediating role of the code of ethics. Economic Research-Ekonomska Istraživanja, 1–19. https://doi.org/10.1080/1331677x.2022.2077791