Ethics in Acc & Finance

8/3/2019 Ethics in Acc & Finance

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BLITZKRIEGSAGAR SALIMBUBESH M.S

AGHIL ANTONY

MUHAMMED ROSHANABDUL NAZAR

KRISHNAPRIYA N.VRAMYA K.P

SREELAKSHMI K.R


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Finance is a social science discipline. The discipline borders:

behavioral economics sociology economics accounting and management.

It concerns technical issues such as the mixof debt and equity, dividend policy, the

evaluation of alternative investmentprojects, options, futures, swaps, andother derivatives, portfolio diversificationand many others.


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Accounting is defined bythe American Institute of CertifiedPublic Accountants (AICPA) as "the

art of recording, classifying, andsummarizing in a significant mannerand in terms of money, transactions

and events which are, in part atleast, of financial character, andinterpreting the results thereof.


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Accountancy is the process ofcommunicating financial informationabout a business entity to users suchas shareholders and managers. Thecommunication is generally in the formof financial statements that show inmoney terms the economicresources under the control of

management; the art lies in selecting theinformation that is relevant to the userand is reliable. The principles ofaccountancy are applied to business

entities in three divisions of practical art,


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Ethics, also known as moralphilosophy, is a branch

of philosophy that addressesquestions about moralitythatis, concepts such as good and

evil, right andwrong, virtue and vice, justiceand crime, etc.


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Accounting ethics is primarily afield of applied ethics, the studyof moral values and judgments as

they apply to accountancy. It is anexample of professional ethics.Accounting ethics were first

introduced by Luca Pacioli, andlater expanded by governmentgroups, professional organizations,

and independent companies


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Relate accounting education tomoral issues.

Recognize issues in accountingthat have ethical implications. Develop "a sense of moral

obligation" or responsibility. Develop the abilities needed todeal with ethical conflicts or

dilemmas.


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Learn to deal with the uncertaintiesof the accounting profession.

"Set the stage for" a change in

ethical behavior. Appreciate and understand the

history and composition of all

aspects of accounting ethics andtheir relationship to the generalfield of ethics. Stephen E. Loeb


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ETHICAL ISSUES IN ACCOUNTING

Provides fair and accuratereporting of the financial positionof a business

Ethical issues

Reporting income, falsifyingdocuments, allowing or takingquestionable deductions,illegally evading income taxes,engaging in frauds etc.


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FRAUD IN FINANCIAL STATEMENT

CAN BE COMMITTED IN 5 WAYS: Fictitious revenue-revenues notactually earned

Fraudulent Timing differences Concealed liabilities and expenses

Fraudulent disclosures or Omissions

Fraudulent asset valuation-falsestatement of the inventory available


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TYPES OF ACCOUNTS Financial Accounts

>company uses to report to theirshareholders

Internal Management Accounts

>shows the internal operations of

the business and its financialactivities


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2 types

>Managementaccountant-

formulating policies

planning and controlling the activities ofthe employees decision making disclosure to shareholders etc.

>Financialaccountant

Economic information to the investors,

employers, suppliers, outside people


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Accountants in professional

practice provides 2 types of accounting service1. The auditor- Appointed by shareholders to audit a

particular company- Duties include: to give an accurate statement about the

state of affairs to meet the objectives of the Companies

Act to be reasonably skillful and careful in

identifying the true nature of accounts


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2. Accountants in related

services- Offer services in different fields

like:

Tax services

Management consultancies

Insolvency services Environmental audits


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The Ethical AuditMain purpose- check the actions of a firm

Objectives

Assess the bus. structure and procedures,systems and policies

Whether busi. Activities comply with thestandards

To identify the way in which it doesbusiness

Evaluate whether mgmt. has relevant

inform. in running the busi.


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To help busi. undergo major alterationslike restructuring

To identify the training necessary for theemployees

Establishing ethical conduct of business

to attract valuable investments Establish code of conduct

Helps the shareholders to evaluate theperformance of the directors and viceversa


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The purposes of the Code of Ethics are todeter wrongdoing and to promote:

honest and ethical conduct, including the

ethical handling of actual or apparentconflicts of interest between personal andprofessional relationships

full, fair, accurate, timely, andunderstandable disclosure in reports anddocuments that the Company files with, orsubmits to, the Securities and ExchangeCommission (the SEC) and in other public

communications made by the Company.


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compliance with applicablegovernmental laws, rules and

regulations

the prompt internal reporting tothe Companys General Counsel

and/or the Audit Committee ofviolations of the Code of Ethics

accountability for adherence to the

Code of Ethics.


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Members of the Accounting and FinanceTeam shall:

act with honesty and integrity by avoiding.

conflicts of interest between his or herown interests and the best interests ofthe Company.

accepting improper personal benefits asa result of his or her position withthe Company.

comply with all applicable laws, rules andregulations of federal, state, provincial and

local governments, and the rules and


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act in good faith, responsibly, with

due care, competence anddiligence, and withoutmisrepresenting material facts orallowing independent judgment tobe compromised

encourage and reward professionalintegrity in all aspects of theCompanys organization by

eliminating barriers to responsiblebehavior such as coercion and fear


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ETHICAL ISSUES IN FINANCEImportance of Financial Statement &

steps to be taken by themanagement for true, fair andreliable mgmt. accounts:

Determining the key elements of thebusiness like the objectives and see howthey are defined and measured

Making sure that the funds are allocatedto different activities on the basis of theirimportance

Frame rules that have a positive effect onbusiness activities


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The Company expects all membersof the Accounting and Finance

Team to honor and abide by theCode of Ethics in all respects.

Members of the Accounting andFinance Team who violate theCode of Ethics will beappropriately disciplined through

action up o and includingtermination. The Audit Committeeof the Board of Directors shallmonitor and make determinationsand recommend action to theBoard of Directors with respect to


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Ethics in Acc & Finance

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