Perception of Accountants Today regarding Scandals and Ethics - Literature review Example

Number] Perception of accountants today regarding scandals and ethics Introduction Maintaining and sustaining accounts is a very critical and crucial task. Accountant responsibilities include examination of financial scenario’s prevailing in the company and market. Balancing the statements, examining cash flows and utilizing techniques and tactics for a better financial position is primarily the job of accountants. Accountants precisely knows that how to adjust money in such a way to save from taxation and other illegal acts. Yen (32) illustrates that there are various accounting scandals prevailing in the corporate world. Accountants hold eminent position in creating such circumstances and fingers has been raised upon them. The ideology and perception about accountants regarding these kinds of issues varies but all the accountants believe in following the rule and ethics of the law. No accountant supports illegal accounting tactics utilization to escape from taxes or any other immoral activity. This research work illustrates the allegations raised upon accountants, the truth behind the curtain along with the perception of accountants. Following accounting principles in true spirits is the name of the game. All the five fingers are not equal, so is every accountant. There certainly are black sheep in this field too so this research work tries to lay an impact on the untold truth behind the bars. The core reasons of doing such acts, vision of accountants with critical analysis. At the end is brief conclusion for the better understanding of this whole research work. Code of Ethics There are various accounting bodies that have developed code of ethics for the accountants so that accountants would precisely know their limitations. Code of ethics basically discuss about the right decision to make in a certain scenario. It exemplifies that what is right and wrong in the accounting language. Morally following the right track is the purpose behind establishing these ethical codes. The American Institute of Certified Public Accountants, Institute of Internal Auditors, Financial Executives Institutes and Institute of Management Accountants has a well established code of ethics plan for the accountants. These institutes highly emphasize on following their ethics (Ward, Dan & Alan 601). The profession of accountants has been one of the most ethics following department among the organizations; however due to recent massive developments in the market, accounting bodies have been asked to strict the ethics teaching methodology in their respective institutes. The primary of all ethics is the understanding of standard of ethics and conduct. Business units have also taken some serious interest in the application of these ethical behaviours in their organizations. The focal point has been accountants however studies show that accountants are the most ethics followers in organizations (Patten 793). Ward, Dan & Alan (603) demonstrate that the codes helps to escort an individual to the right path, however the decision making power still remains in his hand. Study of code of ethics does not ensure that an individual will only ethical decisions and will stay away from the scandalous situations. Researchers evolved set of different scenarios among the accountants to determine the implementation of ethical behaviours practically. The results showed that most of the accountants adopted ethical behaviour. The response of an overwhelming majority indicates the presence of high ethical perceptions among the accountants. Scandals & Issues Prevailed The core of the study remains that what sort of ethical dilemmas and scandals are perceived in the industry which are the causes of such destructive scenarios. The main issue identified by the researchers is the love of money. Accountants are sometimes enforced by the higher authorities to make certain adjustments in the accounts section so that company would get tax exemptions. Different sorts of threats are thus given in this regard in which termination of job and demotion are the most basic ones. For instance a company asks the accountants at the time of paying tax that create such sort of financial position in which half of the tax is being paid upon the profit. The profit earned that year is 30%. Accountants are enforced to do this act and various incentives are offered in return. Accountants will thus show 15% of the profits money spends in the account of entertainment expense, 10% in account payables and ultimately presenting a picture as if company only had 5% profit that year. This would allow the company to pay a very minimal tax (Su 74). The above quoted example demonstrates that how ethical behaviour is sidelined by some of the accountants, due to different reasons which are thus the cause of expanding fingers against this profession. Threatening colleagues of other departments in financial terms is also an issue raised by the researchers and also creating paths for the monetary escape of owners is an allegation raised upon accountants. The viewpoint of accountants regarding these issues is totally different and diverse (Koumbiadis & Jack 103). Maccoby’s Research Maccoby did a splendid work for the examination of morality level among accountants and other professionals through his head and heart traits methodology. The purpose of the research was to determine that which of the both groups have more ethical behaviours. Accounting students were also taken observation to check out the impacts of the study. Various other tactics were also utilized to get the real inside picture. The head and heart traits items assessment process was more simplifier as values were hidden behind each trait (Patten 791). (Patten, p.796) described that results examined through this research work were quite interesting as accountants were suspected to be more ethical than the other workers operating in the organizations. This gave a clear indication that using illegal doors is more of other departments work rather than just focusing on accountants. Accountant’s assessment resulted that they were ethically sound and were not involved in scandalous behaviours. This study carried colossal importance among the accounting bodies because this became the basis for the establishment of ethical boundaries. Head and Heart Traits In Maccoby’s research, head and heart traits were the backbone of the study. The key features of head trait included satisfaction in creating something new, flexibility, pleasure in learning something new, coolness under stress, cooperativeness, pride in performance and self confidence. An overwhelming majority of non-accountants were more in the head traits importance. Business students who were basically non accountants also favoured head traits as according to them they have immense role rather than heart traits (Patten 792). The heart traits included generosity, idealism, passion, humor, spontaneity, decisive and inquiring attitude towards higher authorities, friendliness, loyalty with fellow workers, honesty and independence. The research work summed that accountants are more inclined towards the heart trait thus indicating that they are more passionate about their work rather than any other department in the organizations. Same attitude and behaviour was found in the accounting students (Patten 794) Accounting Students Approach The students of accountants are considered to be more hard working and devoted than the business students. The reason behind this defined by the researchers is the level strictness engraved in their course structure and designing. Accounting students approach is more in problem solving and coming with unique and remarkable techniques. Due to competitiveness in their studies; accountants are focused on education more and try to digest difficult techniques and tactics (Elias & Magdy 277). Psychologist studies prove that accounting students are very loyal to their course works and examine each and every tiny detail in studies. The ethics teaching in accounting fields has been made compulsory which depicts that accountants are trained in such a manner that they may not indulge themselves in illegal or immoral means when they start to work in the industry. Training and development session of accountants revolves around the code of ethics in their learning environment in their respective institutes, thus high level of competent and proficient students come out from these institutes (Yen 138). Accounting students are very serious, devoted, focused, committed and straightforward in their everyday office work after joining the industry. The taught ethics behaviour certainly gives its fruitfulness when accounting students work in the corporate sector. Companies are immensely dependent upon the accountants decision on issues as they are the protectors of the money and precisely know where the money usage would be beneficiary. Most of the business decisions thus are in the hands of accountants (Su 104). Accountants in Industry The current condition of the corporate world and industry presents a clear cut image of organizations colossal reliance and confidence on accountants. This confidence giving mechanism by the top management also has also been the prime issue raised by the critics that accountant’s involvement in business decisions is more than marketing, operations and management departments. As money is beneath accountant’s hand so every department has to praise accountants in every possible ways (Emerson, Stephen & Charles 82). Many other issues evolved also present a picture that as if accountants play roles of villains in the industry. The circumstances are however poles apart; accountants due to their experience know the utilization of money in the right directions. It is also alleged that accountants threat higher authorities regarding critical accounting flaws in the company and negotiate with them. The answer to this scandalous state defined by the critiques has a simple justification that if this was the real state, than companies would have filed law suits against accountants and public would know this matter (Ibrahim, John & Donald 160). Accountants are the saviours of company’s finances and suggest ways to get out of inclining positions. Profitability and growth increase are often explained by the accountants to the management so that organization would progress by leaps and bounds. Accountants due to their professional behaviours are not applauded by the masses as their work is very crucial and critical. There is no chance of giving loophole or ambiguity among the financial positions. Critical Analysis & Conclusion The above stated research work hence presents that accountant’s perception regarding scandals and ethics is clear. Code of ethics taught by the accounting bodies lay a huge impact on accountant’s life thus most of the accountants perform their duties by remaining in the legal jurisdictions. If accountants were involved in bluffing and tricking the organization’s finances, than there would have been millions of cases on accountants, as theft cannot be kept furtive for a long time. Accountant’s role in the industry is imperative as they are pretty much involved in the business decision making process. In today’s world, face of accountants has been portrayed as if the man with organizations money and the nucleus of firm’s monetary assets; thus allowing to raise fingers upon accountants ethically and scandalously. The circumstances are however totally different. The studies show that accountants are more ethically strong and fair in dealings. The precise know how, that where firm’s money is going is the job of accountant and they keep check and balance in it. Accountant’s viewpoint depicts that black sheep in their community must be dealt with severity. Work Cited Elias, Rafik Z. "The effect of corporate ethical values on accountants’ perceptions of social responsibility." Journal of Applied Business Research (JABR) 21.4 (2011). Print. Elias, Rafik Z. and Magdy Farag, "The relationship between accounting students love of money and their ethical perception" Managerial Auditing Journal 25.3 (2010): 269-281. Print. Emerson, Tisha LN, Stephen J. Conroy, and Charles W. Stanley, "Ethical attitudes of accountants: Recent evidence from a practitioners’ survey." Journal of Business Ethics 71.1 (2007): 73-87. Print. Ibrahim, Nabil A., John P. Angelidis, and Donald P. Howard, "Corporate social responsibility: A comparative analysis of perceptions of practicing accountants and accounting students." Journal of business ethics 66.2 (2006): 157-167. Print. Koumbiadis, Nicholas, Grace Conway, and Jack Angel, "Ethical perceptions of newly staffed accountants: an exploratory study". Print. Patten, Dennis M. "The differential perception of accountants to Maccobys head/heart traits." Journal of Business Ethics 9.10 (1990): 791-798. Print. Su, Yun-Kuan "The Study of the Administrative Remedies of Taxation" (2012) . Print. Ward, Suzanne Pinac, Dan R. Ward, and Alan B. Deck, "Certified public accountants: Ethical perception skills and attitudes on ethics education." Journal of Business Ethics 12.8 (1993): 601-610. Print. Yen, Vu Hai . Accounting ethics and its important role for reduction of accounting fraud: An empirical study in Hanoi, Diss. University College, 2010. Print. Read More