Ethics in Accounting

Categories: Accounting

From my point of view, ethics should be an important part of accounting classes.

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The most important reason for this is that actions of accountants do not only impact themselves but it also impacts different parts of society. As their actions can have a huge impact, they should be ethical when it comes to making decisions. In addition, being unethical can display bad human characteristics such as greed and selfishness. The tendency to be unethical can justify the expression “The mean can justify the result”, thus this expression should never be seen as correct from an accountant perspective.

Plus, I want to give an example from recent history to show why ethics should be an integral part of accountants daily work-life.

The example is the Ecron Scandal which happened in 2001. Government deregulations contributed them to act unethically as they need not report their actions to the government. They hide their true results from investors, they just displayed their company as a profitable company to the investors and outsiders.

By looking at company reports, so many people invested in this company. And when the reality, came out so many people were impacted by this scandal. The people who worked for the company went to prison because of their greed to earn more and more money. Plus, all the people who invested their money lost their investment, thus this scandal impacted lots of people. For two crucial reasons which were the impact of unethical behaviors on society and accounts characteristics, ethics should be an important part of accounting classes.

Before beginning with which philosophical principles should be in accounting class, ı want to clarify what is the difference between ethics and morals. According to Differ, both ethics and morality are similar terms when it comes to identifying what is good or bad but there is a key difference. Ethics is used for external and legalized rules which comes from society or workplace while morality is used for rules which come from an individual. The first philosophical principle can be applied is utilitarianism. Utilitarianism is a philosophical idea that determining the good or bad depending on the effect of the outcome. If an action is beneficial for the most number of people, then that is the ethical action a people should take.”

From accounting point of view, if you want to do an unethical act for your company such as changing income statements for outsiders, this would be unethical based on this approach because even if it would be beneficial for insiders in companies, there would be more people outside of the company which would badly be affected by this act. As a result, this act would consider unethical. The key part of this idea is that rather thinking about one person, you need to think about the good of society as shown in the example. On the contrary, we should always remember that this idea isn’t correct for all situations. There might be situations that you need to think about fewer people and still, your action can be more ethical than the other one. The second one we can apply is virtue ethics.

This ethical approach is different from others because this one focuses on employees individually. The belief in this approach is that people have different types of virtues which they can use in the workplace and on their normal lives. With virtue ethics actually accountants will improve themselves as an individual, thus this won’t only help them in their accountant life but it will also help them to have a better and more virtuous life. These virtues can range from compassion, honesty to ambition and determinants. If a person is honest on his life and embraced honesty as his virtue, he would honest when he is an accountant too.

The problem with this approach might be the fact that all the people and all the accountants don’t possess the same set of virtue, thus an accountant should respectable and be aware of virtues of his co-workers and his bosses. To conclude with virtues, as Marcus Tullius Cicero said: “Glory follows virtue as if it were its shadow”. Ultimately, ethics should be taught in accounting classes and especially virtue and utilitarianism should have key roles in teaching ethics.

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Ethics in Accounting. (2021, Apr 21). Retrieved from http://studymoose.com/ethics-in-accounting-essay

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