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This paper seeks to explain the relevance and need to embrace these ethical practices and their impact on the general business performance. Accounting ethics are moral values that govern the profession of accounting. They can also be described as judgments that apply in course of undertaking accounting tasks (Saleemi, 2002). These ethics have become accepted globally by government agencies and companies and help instill some degree of discipline both at organization level as well as employee level. Embracing these ethics cannot be ignored at this time of global economic crisis caused by malicious employees who collude with others and form cartels that have ripped off organizations and government resources leading to complete collapse or closure of once profit-making companies and organizations. Driven by the need to earn profits, an organization should also strive to ensure that shareholders’ interests are met. These interests vary among individual shareholders and as such accounting ethics in an organization are paramount in meeting these. It is with regard of its importance in controlling and monitoring the accounting profession that this paper concurs with adherence to accounting ethics. Accounting Ethics Lead to Better Management and Profitability There are shareholders whose interest is in the capital gains from the company. Pandey (2003) states that if the motive behind investing in a company is driven on capital gains, then the shareholders are likely to have a keen interest in the dividend policy of the organization. Accounting ethics in this case would strive to ensure proper reporting of the accounting statement. Alternately, there are another group of stakeholders or investors who are mostly concerned with a company’s management style and hence would demand that accountants have the necessary skills to help them undertake their task in the most professional way. All government bodies and companies have set ethical measures for the practice of this profession. These include competence, confidentiality, integrity, objectivity, timeliness, full disclosure, materiality and many others which are to look in the discussion. At the height of growing concerns of whether or not ethics play a role in companies’ management, the duty to ensure that all works well rests with the management. Everything progresses or fails due to the management and as such it is paramount to ensure that all ethical practices begin with them (Carbone, 2012). Business is not all about making profits but also how the company is perceived in the general business environment (Belkaoui, 1992). Most of the organizations are driven by the desire to retain their clients. This begins right from the way such clients are handled and their needs met. There are cases of companies that have embarked on this journey of adherence to accounting ethics and as such have reaped a lot of benefits over the years. Some of these are Safaricom Ltd, Sammer Group of Companies, Equity Bank, Kenolkobil, British American Tobacco, Oldmutual Investment Services, Kestrel Investment Services, and British American Insurance (Garrison, 2009). Safaricom has been applauded for observing high standards of integrity in customer relations. This extends from the way they respond to client complaints to the preparation of their accounting statements (Ferugson, 2007). The company has been the most profitable company in Eastern Africa for the past seven years maintaining the lead even in economic recessions as experienced since 2011(Kieso, 2009). Their
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1.b Monopoly In a Monopoly market, the number of seller is one, and they produce unique goods having no competitors in the market and in this type of market the entry for the other parties or sellers is totally restricted (Velasquez, G.M., “Business Ethics: Concepts and Cases”: 167).
The magnitude of values as well as ethics in the professional business world is believed to be superlative along with being global. The constant increase in the degree of competition along with growing complexities has made it necessary for the businesses to pursue values as well ethics.
According to the present day context, it can be observed that the global organizations significantly implement various strategies with the intention to gain incessant developments in relation to its various functions with due consideration to its organizational norms, structures as well as principles in the global context.
Purpose: Apple Inc. Code of Ethics will; - Define acceptable behavior - Promote high standards of practice - Provide benchmarks for all members for their growth and development - Establish a framework for professional behavior and responsibilities - Serve as a vehicle for occupational identity - Serve as a grade for attaining occupational maturity (B Corporation) Apple Inc.
Accounting Fraud: Enron Accounting Scandal Accounting scandals can be easily prevented. The research focuses on the study of the Enron accounting scandal. The research delved into Enron’s window-dressing of its financial statements to present a more favorable balance sheet and income statement.
There are various reasons on an organizational and management perspective, as to why they oppose such seemingly healthy initiative. Managers argue that business ethics programs can cost money to the organizations; as more business-focused companies tend to gain sales with more attention towards performance.
It is a corporation with many subsidiaries in different countries across the world. Arguably, this company serves more than 2.5 million organizations and 26 million residents in Canada and the United States. The company recycles the waste products and also uses it to generate energy (Waste Management 1).
If the issues are true and valid, then I would move to the next step of approaching the management and informing them about the issue at hand. From that point, we can try to negotiate a way that will be most viable in dealing with the situation. The relevant pressure includes the fact that the item of discussion is the main income earner for the company.
For their long term viability it is imperative that businesses carry out their activities in an ethical manner which is acceptable to the society. Whether ethics is derived from religion, traditions or culture there are always some universally acceptable and desired ethical practices.
Accounting ethics is a very important ethical practice for preventing corporate collapses. Accounting ethics has significant importance for different stakeholders related with any organization. It is being noticed that different corporate collapses and recent accounting malpractices has increased the importance of accounting ethics.
15 Pages(3750 words)Term Paper
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