Accounting ethics need to be defined and then followed without
exception in every business in America. Ethics are more than just
morals, in some cases when ethics are ignored, it can be criminal or
First, let's determine what accounting should accomplish in a business
and the situations that should be avoided:
accounting should accurately capture all financial related
occurring or related to a certain period of time.
financial information must then be honestly and accurately reported to
management, the company's stakeholders and to the government.
- Omissions or misrepresentations of financial
events must be avoided.
- Notes to the financial statements need to
explain events that may affect the finances of a business.
guidelines of appropriate conduct in matters of accounting should be
provided by the business and known by those that influence the
- GAAP (financial guidelines from the Financial
Accounting Standards Board) accounting should always be followed.
The management of a business needs to lead the moral and legal
of a business. Clear guidelines for appropriate conduct by accounting
personnel must be established and conveyed. But, even more important,
management must always set the example and lead the way in right
If management wants to misrepresent the financial
results, then the accounting personnel must be strong enough to refuse
to corrupt the information. This is where the business guidelines can
be pointed out by accounting. You can see why these guidelines
so important to have in writing.
Let's face it. There are many
managers that want to "doctor" the financial results and make the
company appear better that it really is. There is tremendous pressure
on management to do so, and just as much pressure from management to
One way to avoid these problems is to
decide how you are going to act before these issues ever arise. If you
haven't firmly decided how you will act if asked to do something
unethical, then you need to do it now. In an intense pressure
situation, you need answers from a time when you were thinking clearly
and not under pressure.