After really big ethical fuck ups by the likes of big companies like Enron, Lehman Brothers, Toshiba, and many more, ethical conduct in accounting is more important than ever. When ethics fail, entire markets can fail.
Institutional Support
Because accountants are accountable both in and out of the company for financials, they have special obligations. The Sarbanes-Oxley Act exists as a means of putting these obligations into law. They impose tough standards and criminal punishments for anyone who doesn't meet those standards. It also opens a door for whistleblowers.
Under the Sarbanes-Oxley Act, CEOs and CFOs must prove their financial statements as legitimate, usually through outside auditing. For this reason, the Act empowers the audit committee of any company's board to hire, compensate, and fire public accounting firms to audit the company. As a counterbalance to this, the Act also limits the services an public accounting firm can give to a company they are auditing to reduce dependency. These audits and auditors are in turn audited by the Public Company Accounting Oversight Board. What this means is that companies are easily audited by independent public accounting firms while these same accounting firms are diversified and held under strict scrutiny to avoid any funny business.
Accountants also find institutional support from Professional Accounting Organizations, who represent management accountants. These organizations certify that these accountants have the technical knowhow and expertise, as well as advocate high ethical standards. In the United States, these are instead actual ethical guidelines. The Institute of Management Accountants (IMA) provides guidance on this front, and even has an ethics hotline for Accountants to walk through any ethical dilemma.
Accountants also find institutional support from Professional Accounting Organizations, who represent management accountants. These organizations certify that these accountants have the technical knowhow and expertise, as well as advocate high ethical standards. In the United States, these are instead actual ethical guidelines. The Institute of Management Accountants (IMA) provides guidance on this front, and even has an ethics hotline for Accountants to walk through any ethical dilemma.
Statement of Ethical Professional Practice
https://quizlet.com/464550048/statement-of-ethical-professional-practice-flash-cards/
https://quizlet.com/464550048/statement-of-ethical-professional-practice-flash-cards/
Resolution of Ethical Conduct
When faced with ethical issues, follow established policies to resolve the problem. If they don't work, then:
When faced with ethical issues, follow established policies to resolve the problem. If they don't work, then:
- Discuss with immediate supervisor, unless they are involved already (in which case, keep going up levels). If you get to the CEO or equivalent, you can go to a group such as the audit committee, executive committee, board of directors, board of trustees, or owners. Contacting above superiors should be done with superior's knowledge (if she is not involved with the initial problem). Communicating outside the organization is not appropriate, unless there is a violation of law.
- Talk confidentially with an IMA Ethics Counselor or impartial advisor to clarify ethical issues.
- Consult attorney regarding legalities
What are the ethical responsibilities of management accountants?
Management Accountants are responsible to many both in and out of the organization. For this reason, it is important for them to emphasize high standards in Competence, Integrity, Confidentiality, and Credibility. Laws like the Sarbanes-Oxley Act, as well as many outside ethical advisory groups and organization exist to help support Accountants in deriving solutions to ethical problems
Management Accountants are responsible to many both in and out of the organization. For this reason, it is important for them to emphasize high standards in Competence, Integrity, Confidentiality, and Credibility. Laws like the Sarbanes-Oxley Act, as well as many outside ethical advisory groups and organization exist to help support Accountants in deriving solutions to ethical problems
No comments:
Post a Comment