THE IMPORTANCE OF ETHICS IN BUSINESS AND ACCOUNTING
Ethics are important no matter what industry we’re talking about or what aspect of life we’re considering. Ethics are the mainstay for proper management of conduction of a process, especially when it comes to finances. Accounting plays a highly crucial role in the financial industry, since most of the money related things are dealt by the accounting section. In order to ensure that the finances are taken care of properly without any type of illegal activities, ethics are to be considered with high regards in business and accounting. Many organizations come up with their own ethical guidelines. The codes of conduct from the Association of Certified Public Accountants (AICPA), the Chartered Institute of Management Accountants (CIMA) and the Institute of Internal Auditors (IIA) share several commonalities.
Ethical codes are the fundamental principles that accounting professionals choose to abide by to enhance their profession, maintain public trust, and demonstrate honesty and fairness.
Here’s a list of a few things that contribute to the importance of ethics in business and accounting:
Objectivity and Independence: To ensure that independence and objectivity while making any type of decisions related to accounting, the professional here must make sure that no outside interference and recommendation is entertained. Since conflict of interest is a serious issue when it comes to accounting, if an accounting professional depends on someone else’s opinion in making accounting decisions, the whole process can lead to a disaster. So, at any cost, an accounting professional must remain independent by doing their job without any external influence.
Integrity: Being and proceeding in an honest and straightforward manner is a must in the accounting industry. Maintaining sensitive information regarding accounting data should be given high priority to ensure that accounting is done with integrity. An accounting professional must always make sure that they stay away from any type of misleading or false information, which can seriously sabotage the business and its accounting.
Professional Behavior: An accounting professional must adhere to appropriate laws and regulations while performing an accounting task. Such professional behavior ensures that proper ethics are followed without any type of violations. Any type of non-professional relationship between accountants and clients or other team members may lead to a chance of biased decision happening in the process. All the persons involved must adhere to professional behavior.
Confidentiality: One of the most important ethics that must be followed by an accounting professional is confidentiality. One must always maintain superior levels of this aspect to ensure that all the financial information that they’re accounting is safe and sound. In fact, lack of confidentiality has brought a lot of companies down, which is why accounting professionals must take this aspect very seriously. Any type of sensitive data leakage can lead to catastrophic situations.
Accountants deal with the confidential financial details of individuals and organizations. Some have the ability to execute million-dollar transactions, and others assist with safeguarding retirement funds.
Ethics are a must for business and accounting and they’re all more important when it comes to a startup, since they couldn’t handle any type of negative reputation due to the violation of terms by not following ethics.