ethicsinaccounting-121231124357-phpapp02

8/11/2019 ethicsinaccounting-121231124357-phpapp02

1/18

Ethics in accounting

BAC8034 ADVANCED ACCOUNTING

Lecturer: PROF. WAN FADZILAH BINTI WAN

YUSOFF

Abdulla Saeed Alhamad

1111800065


2/18


3/18

Enron

Parmalat

Waste Management

WorldCom

Qwest Communications


4/18

List and discuss characteristics of a professional

Explain how those characteristics apply to the management

profession

Define ethics

Discuss various models / schools of ethical decision making

Explain and apply the professional ethical codes of various

management professional organizations

Explain how to resolve ethical dilemmas Give examples of recent ethical cases

Objectives


5/18

Characteristics of a professional

Communicates

effectively

Thinks rationally,

logically andcoherently

Appropriately uses

technical

knowledge Integrates

knowledge from

many disciplines

Exhibits ethical

professional

behavior

Recognizes theinfluence of

political, social,

economic, legal

and regulatoryforces

Actively seeks

additionalknowled e

3-5


6/18

Ethics concepts Definitions

Ethics Moral philosophy

Systematizing,

defending, and

recommending

concepts of right andwrong behavior

Rules or standards

governing the conduct

of a person or the

members of aprofession

Met ethics: where ethical

principles come from

Normative ethics: moral

standards that regulate

right and wrong behavior Applied ethics: specific

controversial issues


7/18

Utilitarianism: the

end justifies the

means.

Rights and duties:individuals have

certain rights;

others should not

interfere with them.

Schools of ethical

thought

Justice: people

should get what

they deserve

Virtues: everyoneshould do what is

right, moral and

virtuous


8/18

Ethics codes in accounting

Principles

Honesty and fairness

Objectivity and responsibility

Standards

Competence and confidentiality

Integrity and credibility


9/18


Association of Certified Fraud

Examiners:

Commitment to

professionalism

Avoid illegal and unethicalconduct, conflicts of

interest

Exhibit the highest levels of

integrity

Comply with lawful court

orders

No expressed opinion on

guilt or innocence

Keep information

confidential

Reveal all matters which

could influence outcome

Strive to increase

competence and

effectiveness


10/18


American Institute of CPAs

Principles of

Professional Conduct

Rules: Applicabilityand Definitions

Independence,

Integrity and

Objectivity

General Standards

Accounting Principles

Responsibilities to

Clients

Responsibilities to

Colleagues

Other Responsibilities

and Practices


11/18

Importance of Ethics in AccountingFraud

r ud

is an intentional deception, misappropriation of a companys

assets, or manipulation of its financial data to advantage of

perpetrator.

Symptoms can include:

Key executives appearing to be living beyond their means.

Key executives have close associations with suppliers.

Company uses several different banks, none sees full financial

picture.

One or two individuals dominate the company.


12/18

Importance of Ethics in AccountingLosses on the Way

Losses due to Unethical Behavior:

Costs of legal action taken against

perpetrators.

Costs of reduced productivity.

Increased unemployment as companies are

forced to downsize or go out of business. Economic loss to organization, hence to

society.


13/18

Solution???

InvestigateMotives for

Unethical

Practice

Administer

Effective

Ethical and

Internal

Controls


14/18

Low

High

Ethical

Motives for Unethical Behavior

High Low

High

Low

Opportunities

Situational

Pressures

Personal Characteristics

(Integrity)

Unethica(Hall, 2004)


15/18

Effective Ethical Controls

A code of conduct that applies to the

practice of a profession.

Objectivity Independence Due CareIntegrity


16/18

Effective Internal Control System

ControlEnvironment:

Influence Control

Awareness of

Management and

Employees.

Risk Assessment:Identify, Analyze, and

Manage Risks

Relevant to Financial

Reporting.

Monitoring:

Entities Activities.

Information andCommunication:

Quality of Info

Impacts Reliability of

Financial Statements.

Control Activities:

Transaction Authorization

Segregation of Duties

SupervisionAccounting

RecordsAccess Control

Independent Verification

Safeguard Assets of the FirmEnsure Accuracy & Reliability of ACCT

Records & InfoPromote Efficiency in the Firms

Operations

Fulfill

Main

Objective

s

(Dina,2008)


17/18

Conclusion

??????

!!!!!!!!


18/18

References

Hall, James A (2004). Accounting Information Systems. Thomson. SouthWestern.

Alexander, Jeffrey Craig, (2002). "Ethics in Accounting?" University ofTennessee Honors Thesis Projects.

Catherine Gowthorpe.(2005). Creative Accounting: Some Ethical Issues ofMacro- and Micro-Manipulation. Journal of Business Ethics 57: 55-64,2005. DOI 10.1007/S10551-004-3822-5.

Felix Pomeranz, (2004),"Ethics: toward globalization", Managerial AuditingJournal, Vol. 19 Iss: 1 pp. 814.

ethicsinaccounting-121231124357-phpapp02

Documents