Law management essay on: Ethical behavior in accounting profession

IntroductionThis essay gives the brief overview about the ethical behavior in respect to the profession of accounting. According to the accounting perspective, ethical behavior might be expressed as executing the duties of accounting in relation with GAAP like accuracy, objectivity and reliability. This essay also answers the arguments posed by the Fogarty and Collins & Schultz.

Ethical Behavior in context of the profession of the accounting

The objective of the ethics in the businesses is to direct employees and managers and aware them to follow code of the ethics which shall maintain and create confidence and trust of the public in their services and products. Like Individuals, professionals form their values of ethics, namely the code of the ethics in the stages over the time. According to the perspective of the accounting, ethical behavior might be expressed as executing the duties of accounting in relation with GAAP like accuracy, objectivity and reliability (Francis 1990). For Example: IESBA is accountable for issuing and developing standards of ethics and offering suggestion for the profession of accounting.It has been examined that regulation is significant, and it’s not on its own sufficient for achieving the purpose of ensuring consistency and quality in creation of the professional services. No regulation could be efficient until and unless if it is surrounded by the ethical behavior.

In general, ethical nature of the accountant practitioners is to offer the good quality of services. In fact systems of the regulatory have been designed for promoting and accomplishing ethical behaviors (Francis 1990).  High quality of the services is considered as the role of professional standard comprising personal competencies, regulatory systems, values and ethics.

It has been evaluated that Collins & Schultz have suggested that as compared to offering moral guidance and suggestion to the CPA, there is the code of the conduct issued by the AICPA which works as the window dressing for minimizing the criticisms and strengthening the confidence of the public (Collins & Schultz, 1995). It is very clear that, Code of the professional Conduct issued by the AICPA claims to provide guidance and suggestion in the ethical issues facing by the accountants (Eynon, Hill & Stevens, 1997). The Code of the professional conduct is considered as a group of rules which guides conduct in particular situations. This code of conduct acts and performs on the absence of their members and offer essential hold to make sure that the CPA serves the interest of public in the well manner by executing quality services. In meeting its objective, the AICPA offers preference to those regions where the dependence of the public on the skills of CPA is more significant.  In fact, it is also viewed that AICPA has several professional and technical committees which transact with several issues facing by the CPAs and their public and the clients. It can be possible that the code of ethics of the AICPA works for diminishing the disagreements and increasing the public confidence as compared to work as the moral director for the CPAs. It has been examined in year 1988; revisions were placed after the criticisms from the Arthur Anderson and agencies of the Government. In this kind of situations, there should be a professional approach for using appeals to the ethics code as the mask for safeguarding the perspective of profession on world.  I agreed with the Collins & Schultz because code of the ethics issued by the AICPA performs on the absence of their members and offer essential hold to make sure that the CPA serves the interest of public in the well manner by executing quality services. According to the Frankel, the autonomy and status of the profession are associated with the perceptions of the public about its quality and motives of the performance (Frankel, 1989). In fact by following code of the ethics, the profession of accounting hopes to benefit the trust of public and increase its status.But on the other side, some people have argued that sometimes, the code of the ethics might function as an instrument for manipulating the impressions of the public, if code of the ethics is referred as a subject of the strategy as compared to morality.

It has been examined that Fogarty claims that reduction of the moral reasoning suggestion to a group of behaviors might create more harm as compared to good and that dependence on the rules could strip the individual of his analytical skills and critical thinking (Fogarty, 1995). The requirement for maintaining the trust of public in the reliability of the profession of the accounting has created to enhanced interest in the research which studies the MRA of CPAs. It has been evaluated that MRA of the small company CPAs is lesser in comparison to other practitioners of accounting and lesser in comparison to college students. In fact, lower MRA level must encourage the accounting profession to view the college curriculum of accounting and programs of education. It is also viewed that Big 6 CMAs and CPAs, it reveals that practitioners of accounting in all practice fields don’t have expected MRA for the educated adults of college and in specific, MRA of the practitioners of the small firm suffers most. This would not reveal that accounting practitioners of small firms have lower skills of moral reasoning, but on an average, these practitioners of accounting as the group score low in comparison to estimated on DIT. The function of the practitioner of the accounting is not same in comparison to other professionals for example: CPA obliges primary allegation to public and individuals as compared to the fee –paying user and client. The tension among serving the public and the client might show that CPA experiences more moral confusions as compared to other professionals. For instance: the CPA working as the preparer of tax return and is placed in complex ethical dilemmas. While preparation of the tax returns, the CPA should fulfill the needs of the fee paying user and client whereas still dealing with the Code of Internal Revenue and the professional Ethics Code for accountants that stresses on the CPA ‘s main commitment to the individuals and public. According to the survey of Finn et al’s, he searched that CPAs search that approximately 16% of the respondents refer conflicts of independence and interest as the major moral obstacle they experience and approximately 10% responded that problems of fee were the major problem and 12% revealed that requests of the clients for the alterations in financial statements (Finn, Chonko & Hunt, 1988). Another kind of the explanation shows the conflict among the primary allegiance and generation of revenue. For example: In the Big 6 company, people at the level of entry are not accountable for paying the users and clients and in collection of the fees. It is also viewed that it might be simpler for the entry level of the CPAs to gain greater levels of Moral Reasoning Abilities (Because CPAs are not usually experienced with the conflict of the interest). It can be said that accounting practitioners of small firms reveal lower levels of the MRA as anticipated for the executives and that gender, beliefs of social political and age impact the MRA of the accounting practitioners of the small firms. It is searched that execution of the course of the ethics in the college will have a positive consequence on the MRA. Lastly, the reality is that accountants with the lower abilities of moral reasoning are considered as the lower supporter of the ethical training and may reveal that the requirement for the mandatory, development and training in ethics in both courses of Professional Education and University (Bishop & Tondkar, 1987). I agreed with the view suggested by the Fogarty, because in recent time practitioners of accountants with lower MRA are considered as the least supporter of the ethical training. The requirement for maintaining the trust of public in the reliability of the profession of the accounting has created to enhanced interest in studying the MRA of CPAs and which supports the argument of the Fogarty that reduction of the moral reasoning suggestion to a group of behaviors might create more harm as compared to good.But on the other side, some people have argued that rather than offering moral guidance and suggestion to CPAs, there is the Code of the Conduct issued by the AICPA which works for diminishing the criticisms and increasing the confidence of the public. It is difficult for the accounting practitioners to deal with several moral issues at a single time like conflicts of independence and interest, fee problems and requests of the clients for the alterations in financial statements.

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