Business Research Ethics
Business Research Ethics
RES/351
August 4, 2014
Business Research Ethics
The accounting world is changing constantly and so are the rules that are being set up to protect companies and their assets. There are codes of conduct that accounting offices and their personnel must adhere to and when they are not followed, there can be an ethical challenges that you have to deal with.
Users of accounting information perform different types of creative accounting. Some of these practices are ethical and legal and other are not. It is important for a company to set up procedures that check and double check everyone in the accounting department from the clerks to the Controller. There is never a time in any business that someone is allowed to do things without having someone else check on their work. When there is no follow up or checks set in place is when the company finds themselves in trouble.
As accountants, we are required to make sure that the work that we produce is accurate, credible and true information. This information is used to help investors and banks to make a good business decision in regard to their credit and investment opportunities. Many times, an accountant will get “creative” with the numbers to assure just that outcome. The numbers are inflated to show a better financial picture and this will help the company get more money and have the bank invest more in their future. Sometimes, this can go on for a long time without anyone knowing it is all false. Other times, companies get caught. May I remind you of Enron? Over the years stockholders and investors have lost large amounts of money due to false reporting or “creative” accounting. It is for this reason that the need for restrictions on those practices and find a solution to this problem became necessary. A company that I worked for in the past had to eventually file for bankruptcy because the Executive Board was unaware of what the Controller was doing. Many of us
RES/351
August 4, 2014
Business Research Ethics
The accounting world is changing constantly and so are the rules that are being set up to protect companies and their assets. There are codes of conduct that accounting offices and their personnel must adhere to and when they are not followed, there can be an ethical challenges that you have to deal with.
Users of accounting information perform different types of creative accounting. Some of these practices are ethical and legal and other are not. It is important for a company to set up procedures that check and double check everyone in the accounting department from the clerks to the Controller. There is never a time in any business that someone is allowed to do things without having someone else check on their work. When there is no follow up or checks set in place is when the company finds themselves in trouble.
As accountants, we are required to make sure that the work that we produce is accurate, credible and true information. This information is used to help investors and banks to make a good business decision in regard to their credit and investment opportunities. Many times, an accountant will get “creative” with the numbers to assure just that outcome. The numbers are inflated to show a better financial picture and this will help the company get more money and have the bank invest more in their future. Sometimes, this can go on for a long time without anyone knowing it is all false. Other times, companies get caught. May I remind you of Enron? Over the years stockholders and investors have lost large amounts of money due to false reporting or “creative” accounting. It is for this reason that the need for restrictions on those practices and find a solution to this problem became necessary. A company that I worked for in the past had to eventually file for bankruptcy because the Executive Board was unaware of what the Controller was doing. Many of us
References: Al Momani, M. A., & Obeidat, M. I. (2013). The effect of auditors ' ethics on their detection of creative accounting practices: A field study. International Journal of Business and Management, 8(13), 118-136. Retrieved from http://search.proquest.com/docview/1418426106?accountid=458 Leung, E. C. (2004). Accounting ethics. Business and Society, 43(2), 226-226+. Retrieved from http://search.proquest.com/docview/199387513?accountid=458