Ethics is a sensitive issue that is still a significant concern in the business world. Notable literature from previous topics on ethics in accounting exists. Vast research on ethics in accounting has been previously done. Studies in ethics in business date way back in the 1970s. Ethics in accounting started in the 1990s. This chapter entails a review of the foundational theories on ethics in accounting and the research gaps that guided this research. Four past research papers on ethics in accounting were studied in this section and provides a theoretical, conceptual and empirical framework to guide the research process.
According to Jennings & Marriott, Ethics in accounting refers to the moral values; professional principles and judgments that professional in accounting abide by in the accounting profession. Such values are responsibility, fairness, integrity, honesty and confidentiality. The maintenance of a high level of professionalism and proper conduct are the primary drives of ethical behavior in accounting. Lack of ethical responsibility by professionals may lead to poor company reputation, unsatisfied clients, financial statements tend to be less useful because they are fixations thus lose meaning, and investors are reluctant to invest in the company. The role of accountants in ensuring accurate and timely financial reporting is a sensitive role that requires good professionalism. There are rules and regulations that have been established for the governance in accounting. These regulations help reduce the number of scandals related to finance. Ethical misconduct may be due to personal interest, influence, laziness, unqualified accountants and malicious reasons. The Federation of European Accountants in their 2012 report shows that there is no harmony in accountancy across 30 European countries regarding registration credentials, supervision, qualification and monitoring. Across all four articles, ethics in accounting is a sensitive matter and a lot of resources and time has been invested in researching this issue.
.Previous studies have shown that various factors affect the ethical behavior of accounting professionals. Such factors include the age of the professional, size of the firm, and presence of a professional certificate. However, some factors differ in different studies. Such factors are rank in management and gender where there are mixed results in various studies.
According to , Jennings & Marriott , in the book accounting ethics, they explain that accountant plays an instrumental role in the business community through the provision of essential services that guide the financial decision-making process. Sometimes, however, their accounting skills can be misused by greedy people for individual benefits, illegal operations and fraudulent at the expense of the society. They go ahead to illustrate how sometimes accountants “cook the books” or commonly known as “creative accounting” in liaison with their managers to impress their bosses. Such actions are unethical. Sometimes the accountants when trying to sell their company to clients, investors or banks when applying for loans are faced with the dilemma of not knowing how much information to reveal. Some may tend to hide small flaws in the books to impress the second party, but this ends up ruining the reputation of the company in the long run.
In their research, Miller & Power (2013), explained a number of things on ethics in accounting. This paper urged researchers of administration to focus on the commonly constitutive nature of bookkeeping, arranging, and managing. This implies seeing bookkeeping as considerably more than an instrumental and simply specialized action. They recognized four key parts of bookkeeping: first, territorializing, the recursive development of the measurable spaces that on-screen characters possess inside associations and society; second, intervening, that quite a bit of what bookkeeping instruments and thoughts do is to interface up unmistakable on-screen characters, desire, and fields; third, arbitrating, that bookkeeping assumes a definitive part in assessing the execution of people and associations, and furthermore in deciding failings and disappointments; and fourth, that bookkeeping is a subjectivizing practice second to none, that it the two subjects people to control or direction by another, while involving the assumption of an individual allowed to pick. The ensnarement of these four parts, we recommend, is the thing that gives the “bookkeeping complex” its beneficial power, to such an extent that it is maybe the most ground-breaking arrangement of portrayal for social and financial life today in numerous national settings. We look at these issues through a specific audit of the bookkeeping writing in view of the development of two scholarly accounts. One manages the development of insightful enthusiasm for associations which made the conditions for a conduct turn in bookkeeping research and the installing of bookkeeping inside administration grant. The other schematic history manages the development of regulating bookkeeping instructional method and hypothesis from training. This was tested by an experimental “upset” drawing on the strategies for explanatory financial matters which was extensively advertise based, confronting far from administration. They contended for a third assemblage of work which responds to the reductionism of both and which centers around the procedures by which bookkeeping portrayals and measurements are all the while intense intercessions which shape individuals, practices, and associations. We recommend that bookkeeping is a component by which the economization of hierarchical life ends up explained and systematized.
Tweedie, Dyball, Hazelton & Wright (2013) did an extensive research paper on ethics. This paper tended to the strain between worldwide morals principles and various moral points of view through a nearby investigation of IFAC’s system in executing International Ethics Standard 4. IFAC’s approach is to order just the expansive themes that a morals training program must cover, while leaving singular establishments to adjust their particular encouraging projects to accommodate their own neighborhood convictions and needs. In any case, this system must be bolstered in the classroom by sufficient assets and showing procedures, and they demonstrated that teachers do not have the profundity and decent variety of morals assets that IFAC’s methodology requires. While the particular outcomes introduced identify with Australia, they may well delineate more broad pragmatic issues with IFAC’s worldwide morals motivation, and without a doubt with endeavors to actualize a worldwide morals system in any calling or train.
Be that as it may, regardless of these issues, they indicated how IFAC’s academic system may be enhanced by joining moral thoughts from outside the standard Western group. While distinguishing a few preferences of this procedure for understudies, they additionally recognized the huge limitations under which bookkeeping instructors by and by work. To address these requirements, they proposed a more coordinated way to deal with morals training crosswise over bookkeeping instruction educational module, and a technique for presenting differing moral thoughts under an arrangement of verbose subjects. This “topical” way to deal with morals training could incorporate moral goals and understudies from different moral conventions without expecting teachers to learn or introduce a completely created record of these customs. This methodology will be less point by point and exact than a “course reading” way to deal with morals training, yet it will probably draw in understudies in moral reflection, and is obviously desirable over the present default procedure of essentially barring non-Western moral conventions – and consequently the understudies who hold fast to them – completely.
This study suggests that the ethics in accounting play a vital role in the capitalist world. Accounting is the backbone of every business and therefore needs to be handled carefully and with a high level of professionalism.
One of the implications of the study results is that organizations should work to ensure a healthy leadership and employee relationship. The employees should be made to feel comfortable to express their feelings at the place of work. They should be able, and the leaders should provide an audience for them and give them direction and new ideas to perform their tasks better, Horomnea & Pascu (2012).
Another managerial implication is that leaders should practice and build ethical leadership in the workplace. They should encourage the employees to ensure integrity at all times even when they are not under supervision. The management should come up with a strategy to ensure that the employees give their full potential to work towards an ethical misconduct free workplace.
Organizations also should put in place programs to train their employees on corporate social responsibility. These training will touch on sensitive behavior and how ethical misconduct will affect the business and company at large. The employees learn about the implications of ethical misconduct and thus start to work toward avoiding them.
During the study, several limitations were experienced thus hindering the research process. First is the lack of data and enough information to work with during the research process. With more information, more accurate results would have been possible.
Another limitation experienced is the lack of resources which hindered the data collection process thus a limited amount of data to work with.
There is also not enough research on this topic. The available research is however not very detailed, and the available data is not accessible.
The methods of analysis used are different. Therefore it is hard to deduce which method is optimal to work with.
Progress has been made in ethics in accounting, but many research questions remain unanswered. More research on this topic is recommended to clear some of the contradicting factors that contribute to ethical misconduct. More research in gender, rank and age as factors that determine the response of an individual to ethically questionable practices should be done to come up with harmonizing reports since some reports are in contradictory. Future research could survey how effective these systems are by and by in at the same time meeting the targets of a worldwide morals instruction standard like IES4, the requirements of understudies, and the handy imperatives under which tertiary instructors right now work.
References
Horomnea, E. and Pascu, A.M., (2012). Ethical and Morality in Accounting Epistemological
Approach. Journal of Eastern Europe Research in Business & Economics, p.1.
Jennings, P. and Marriott, N., Ethics in Accounting.
Miller, P. and Power, M., (2013). Accounting, organizing, and economizing: Connecting
accounting research and organization theory. The Academy of Management Annals, 7(1),pp.557-605.
Tweedie, D., Dyball, M.C., Hazelton, J. and Wright, S., 2013. Teaching global ethical
standards: A case and strategy for broadening the accounting ethics curriculum. Journal of Business ethics, 115(1), pp.1-15.
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